LOAN MODIFICATIONS
I blogged awhile back that I was working with a
loan modification company. They are having success. There are a few things you should know about the process. Keep your payments current if possible and if not, don’t wait until you’re 3 months behind to talk to a company that can help you (don’t spin your wheels with the bank unless you get immediate attention–they’ll drag it out). I’ve spoken with many people who have tried to deal with the banks directly and have gotten NOWHERE. It’s such a shame that we cannot call our lender and work something out directly with them. Instead, you may have to become delinquent in your payments and then hire a loan mod company to negotiate for you–check with a professional.
Keep in mind that if you make too much money, you most likely will not qualify for a loan mod. Take your gross income and start subtracting all of your expenses. Now, this does not include fitness memberships, golf club memberships, entertainment expenses and the like. The only thing the bank is interested in as far as hardship is what the bottom line is after you’ve paid your monthly LIVING expenses, i.e., mortgage, insurance, property taxes, payroll, federal and state taxes, groceries, utilities, car payment(s), gas for your car, school loans and similar items — NECESSITIES. If you have huge credit debt, you will be required to go through credit counseling. Bottom line….THE BANK DOESN’T CARE IF YOU’RE UPSIDE DOWN IN YOUR PROPERTY. You will have to prove a hardship, i.e., curtailment of income, loss of job, illness, etc.
The fact of the matter is that the banks don’t care if the property’s value is less than you owe. They just want to be paid. I’ve heard stories of people who’s home value has dropped; the house down the street is for sale for less (and perhaps it’s bigger), so they walk away from their obligation and buy the one down the street….maybe they even take all the nice things out of their current home, i.e., refrigerator, ceiling fans, lights, other appliances, even countertops. I have a problem with this. I think it’s immoral. This has got to stop somewhere and people who are doing this are part of the problem, not the solution.
Most of us are victims of this mess. Just sit tight, pay your bills and hopefully we will see an end to this. If you’ve lost your job or have fallen on hard times because of illness, that is a different story. Just don’t perpetuate the problem by being a quitter. Get a handle on your situation and talk to as many people as you can to get good information.
