OPTION #1   “THE LOAN MODIFACATION”

WHAT IS A LOAN MODIFACATION?

The loan modification basically is modifying your loan.

You call the bank and tell them you have 6 or 7 payments and you want to do a loan modification.  This means the bank will put the other 3 or 4 payments on the end of the loan. 

Doing a loan modification most of the time the bank will require 60%-70% of the back payments to be made plus, all attorney fees.

Note: if you have late payment fees, back real estate taxes, property inspection charge or forced insurance due the bank will make you pay this at this time too.  Sometimes they will waive the late fees only.  

Remember this point

You can only do 1 loan modification per year or only 4 per the length of the loan however; no more than one per calendar year. If you refinance with another mortgage company then the loan modifications you did before don’t count, new mortgage company, clean slate.

The bank might ask for “Proof of Funds.” This means you have to prove you have the money.  The bank may ask for a copy of your last 12 months of bank statements.

Once this is done you are one step closer to keeping your home.  

OPTION #2   “THE FORBEARANCE AGREEMENT”

WHAT IS A FORBEARANCE AGREEMENT?

If the Loan Modification doesn’t work because you don’t have the funds they are asking for, then The Forbearance Agreement may be better for you. The Forbearance is a workout agreement with the bank.

Here is How a Forbearance works.     

The bank will always ask for attorney fees and then approximately 40%-50% of the back payments. 

You have to qualify for this. Everyone qualifies, it’s just some will pay over 12 months, some over 6 months.  

Remember these 2 Important Points

1.) 85% of Homeowners fall out of the Forbearance agreement in the 1^st 2-3 months, because of the failure to pay.

2.) Just because you have worked out a deal with the bank, you are not out of foreclosure. You are still in Foreclosure till your 9^th payment is made. Then and only then, will you get a foreclosure withdraw letter from the bank, stating your loan is current.  The bank will keep passing the foreclosure date every month.