LOAN MODIFICATION
Program Introduction
What is Loan Modification & how does it work?
A loan modification is a change in the loan contract agreed to by the lender and the borrower. It is a win/win situation for both the borrower and the lender because it allows the borrower to stay in their home making payments that are now affordable and it helps the bank from foreclosing. Oftentimes homeowners find themselves struggling to make their mortgage payments along with all of their other monthly debts and this leads to a very stressful and challenging situation.
We have contracted with a company who specializes in Loan Modification and in helping people find alternatives to foreclosure and the loss of their home; they understand that the situations that borrowers are in is often due to circumstances outside of their control, so they work with the borrowers in order to understand their financial situation, the circumstances and hardship and work to determine a payment that’s affordable. Then working with the lender/servicer they negotiate the new terms of the loan on the borrower’s behalf. In addition to their expert staff, they also have a full time attorney in house working on the borrower’s behalf. Their objective is to make sure that the borrower realizes that no matter how bad their situation might be; foreclosure may be avoided if they take prompt action.
How do I know if I am a candidate for a loan modification?
If you answer yes to one, some, or all of the questions below, you may be a good candidate to have your loan modified. Please remember, in order to qualify for a loan modification a hardship must exist or is imminent and must be effectively communicated. A loan modification is not a replacement for a traditional refinance; it is only used in combination with a hardship.
· Have you been turned down for a refinance?
· Is your loan a higher amount then your home is now worth due to declining market values?
· Do you have poor credit?
· Have you been late on making your mortgage payments?
· Has your income recently been greatly reduced? Loss of job? Change in jobs?
· Health issues caused time away from work?
· Recent divorce and now you don’t have enough money to meet your monthly bills?
· Are you a business owner and your work load has declined, affecting your ability to pay your monthly bills?
· Are you in an “adjustable” loan, an “Interest Only” loan or an option arm that is getting ready to adjust or has adjusted, and you are struggling to make the payments?
How much does this cost?
There is a one-time fee of $2,995.00 which will be due and payable in advance. However, we will not accept any sort of payment from you, until we complete the “Loan Modification Intake Form” and pre-qualify you to see if your loan may be modified.
As we go through the process there may be additional information and documentation needed. Please also keep in mind that this letter does not constitute a commitment or approval for assistance. Normal collection proceedings up to and including foreclosure, will continue during the reviewing process. Typically with most lenders/servicers as soon as a borrower’s file is assigned to the representative to work on, they are in communication with their other departments advising them the borrower has requested a loan modification.
Please Note: Neither Aiello & Associates nor contracted company can guarantee that your loan will be successfully modified as each case is different.
Once your case in process, it is important that you do not contact your lender whatsoever as this may jeopardize the loan modification. We will update you on the process of your case which usually takes between 45 and 90 days.
We recognize the anxiety that is caused when you are in a mortgage that you’re struggling to pay, so we will work alongside you through this process. We value you and our relationship with you and trust that, together, we can help improve your situation.
If you have any questions please feel free to contact us immediately.
Client Options
Has a hardship affected your ability to pay your mortgage?
First, congratulations on making the right decision. At Aiello & Associates, we can provide you with several options available to assist you during this difficult time, depending on your individual situation and personal goals. There is no “one size fits all” solution – we will sit down and review all your options and then help you navigate through the process. Generally there are seven options available to homeowners who are late on their mortgage or faced with a financial hardship:
1) Refinancing – If you still have equity in your home but have fallen behind in your monthly payments, for whatever reason, this will help you get caught up and possibly pay off other debt you may have accrued. We offer a variety of loan programs and will find one to suit you.
2) Forbearance Agreement – Most lenders will try to entice borrowers with a Forbearance Agreement. This is a formal repayment agreement between you and your lender where you pay your normal mortgage payment and a portion of the delinquent amount due on your account. The objective is to allow you to cure your default over a manageable period of time, once you are in a better financial position. Under a Forbearance Agreement a homeowner may not have to pay their mortgage payment for a couple of months, which sounds inviting, but the consequences of defaulting on the agreement can be devastating. Negotiating a Forbearance Agreement with your lender is not something you should attempt on your own.
3) Loan Modification – If your current loan is an Adjustable Rate Mortgage (ARM) and it has adjusted or is due to adjust soon and you can’t afford the new payments, or you have experienced a financial hardship and fallen behind in your mortgage payments, we and our “contracted company” will negotiate with your lender in an effort to modify your loan terms so that you can stay in your home. We may be able to arrange for any delinquent amounts to be added to your principal and/or freeze your interest rate for a set period of time, allowing you to cure the default and restore your credit. Even if your home is no longer worth what you owe, you may not want to throw away any down payment and improvements you have made in your property by selling, especially if you have the ability to make the payments under a modified loan agreement.
4) Short Sale / Pre Foreclosure Sale – If you simply can no longer afford to stay in your home and a loan modification will not work for you, we can assist you in selling your home. While the decision to sell your home under these circumstances is not an easy one, it may be the best decision for you and your family. A Short Sale occurs when your home is sold for less than the amount you owe on your mortgage, and your lender agrees to accept the lesser amount as a full pay off. We are licensed Realtors who will actively market your property, work with your lender, and try to sell your property in order to avoid a foreclosure.
5) Deed in Lieu of Foreclosure – In the event you have decided you can no longer afford to stay in your home and you don’t want to go through the effort of a Short Sale or to face the prospect of a Foreclosure, you may voluntarily return your property to the lender. Your bank may accept your offer to transfer title in return for a full satisfaction of your mortgage debt.
6) Foreclosure Sale – This may be a viable option to get you out of a losing proposition if attempts to modify your loan or sell your property have not succeeded. Facing foreclosure on your own can be intimidating, but we can walk you through the process and advise you of exactly what to expect along the foreclosure timeline (see typical Foreclosure Process and Flowchart). Many clients use this time to prepare themselves to start rebuilding their credit and pay off any accumulated debt.
7) Bankruptcy Protection – Understandably, most people find the prospect of filing Bankruptcy daunting. In fact, this may actually be a good opportunity to get out from under the constant pressure of struggling to pay your debts and get a fresh start. If you have a lot of consumer debt in addition to your mortgage, and you can’t pay it off within a reasonable amount of time, then you might want to consider filing for Bankruptcy protection. We can help you calculate whether this is an appropriate option for you.
We will explain the advantages and disadvantages of each option available to you so that you can make a fully informed decision. Having accurate information and knowing what to expect is critical to maintaining control of your financial future and having a peace of mind.
The most important thing is not to panic just because you may have fallen behind on your mortgage payments or even received a Notice of Default from your lender. While it can feel overwhelming, there are solutions, and the sooner you act, the better your chances for a more favorable outcome.
You’ve already taken the first positive step by visiting AielloAndAssociates.com and reading this important information, and together we’ll create a personalized financial solution that works for you!
If you would like to submit your information to see if you may qualify for a Loan Modification click on the following link: Loan Modification intake form
The information contained herein is for general information purposes only. It is not intended and should not be construed as legal, tax, accounting, investment or any other professional advice or counsel and does not constitute an attorney client relationship. Since every individual's factual situation is different, you should consult with independent professional advisors familiar with your particular circumstances for advice before making any decision regarding the disposition of your property or taking any action that may potentially affect your future credit worthiness and/or result in additional tax or other liability. Nothing contained in this material shall be construed to be a guarantee or prediction of results.
