Much of the media has been reporting that homeowners are complaining that their bank is stalling or delaying their permanent loan modification. Some of the facts surrounding mortgage re-structuring is cloudy and few homeowners understand “all” the details involved.
To shed some light on the topic it is important to be aware of the following facts:
1. The lenders and servicers handling the paperwork on your modification are using mathematical ratios.
2. The documents you send to the bank (if you are doing it yourself) are the key to your success or failure.
3. Your expense to income ratio along with debt to income ratio are factors. Your mortgage payment, the type of mortgage, who owns the “note” and the percentage of your income to your mortgage payment will also largely define your trial payment plan if you are approved.
The trial plans are designed to allow the homeowner to make payments for a set period of time (typically 90 to 120 days) with no grace period. The purpose is to be sure you can maintain a consistent payment history. Between 2008 and 2009 the banks gave out perm mods to homeowners who eventually defaulted . The banks spent money and resources to staff the processors only to end up foreclosing on the home costing them more money. The banks are learning fast, and they now want to be sure the trial period can be maintained before they will issue a perm mod. We are seeing the banks re-issue temp mods to more people before they will commit to a perm mod. This trend will likely increase as more people in America need help saving their home.
The banks will request your updated income statements such as pay stubs throughout the trial period to be sure your income doesn’t change. If you begin to make more money, it could affect the payment of your temp modification and certainly will affect your perm modification. Keep this in mind if you are handling the process yourself. One mistake will cost you the approval. (see our previous Blog on Banks and their affiliated relationships)
Our high success rate is a result of educating our clients and asking all the right questions up front during the Pre-Qualification process. We spend significant time with each homeowner to understand their specific needs. Each persons situation is 100% unique to them, so we must first understand it before we can recommend options. Once we have all the documents necessary, we’ll underwrite the file to be sure it fits with the banks guidelines. Only then, will we retain the client and accept the file for submission.
Be sure to check out all the video tutorials on our website http://www.HowToSaveMoney360.com