In the last issue, we ran a story about the travails of a woman seeking to modify her mortgage. We received a number of responses from Dream Villager readers, most identifying with the author. However, we had a letter from Jeffrey Charo of Homestart, a business to help homeowners find a modification. Even knowing that Mr. Charo is in the modification business, his letter did offer solid information and encouraging words to others seeking to modify their loans.
I read the article, “Playing the Loan Modification Lottery”, in last month’s issue. I can show the author that Loan Modification Lottery is not a Lottery at all. First of all, notice that notwithstanding the author’s experience with the loan modification process she did get her loan modified. What was not realized by the author is that loans are modified every day and in large numbers.
Programs: There are a number of different programs besides the HAMP program used by the author. There are various programs that the banks may or may not participate in. There are programs that the Federal government insures, others that the government gives incentives to the bank for, and internal programs within the bank as well as ones funded by investors.
Qualifying: Everyone talks about whether the homeowner “qualifies.” Even when you do not qualify, you may still end up qualifying, because banks, investors….can make exceptions. For example, guidelines allow for 31% of your gross monthly household income to pay for PITI, (Principal and Interest, real estate Taxes and Insurance) and if you are paying in excess of that 31% you may qualify for a modification. However, did you endure a specific hardship? Medical, financial, loss of income, divorce, lost job, lessened hours, etc. ……That may help your case.
Legal Questions: Do you know that a short sale can come back to bite you, financially, in the future, when it is not properly done with your lender(s)? Did you know your vacation home, or condo, rental property, commercial or investment property may also be a strong candidate for a loan modification? Could be?
Next Steps: Make the effort. Do the homework. Get help if you need it. Check references, licenses, and accreditation of any advisor assisting you. Check with the BBB. Go online to government web sites. My company, Homestart, can certainly help you navigate the confusing array of terms, programs, and applications.
Good Luck! I am sure you have heard about the failure rates, and assume that everyone fails. Just not true. The odds are better than the lottery, and the wins are really in your favor, and they happen every day.
Jeffrey Charo, CEO
858 581 1800