Loan Modification*
Loan modification is taking the existing loan on your existing home and doing any one or more of several things.
It can involve:
- Forgiving past due amounts
- Rolling past due on to the end of the loan
- Fixing the rate on what was previously an ARM
- Extending the amortization period
- Giving a reduced rate for a short period (be careful not to fall into the same trap as got you here)
- Other possibilities depending on your situation and the bank's willingness to negotiate.
The reality is banks do not want your bad loan. It is called a negative or non-performing asset and banks are allowed only a certain percentage of their loan products to fall into this category. If they exceed, they can be taken over by governmental agencies. All the banks which failed in the past 2 years did so because of this very reason.
If there is a way in which your loan can be moved from non-performing to performing, it is in the bank's best interest. If your home slides into foreclosure the bank will have to assume a property they don't want. Along the way they will incur the interest they are paying on *their* loans as well as court costs and attorney's fees. There is also no guarantee out the back end that they will be able to sell the property for enough to recoup their money; it's gambling at its most dangerous.
The down side to loan modification is the bank will evaluate to see whether you are indeed capable of paying on the modified loan, or whether it is forestalling the inevitable. Having a good negotiator, as well as someone who will help you prepare for this process is probably your best defense.
We charge a flat fee for assistance with your loan modification. While we do not guarantee the outcome, because ultimately that depends on your viability in the eyes of the bank, we will do our best to level the playing field. The fee depends on the number of lien holders and the complexity of the process and is not collected unless the modification is successful!
You may not need our services -- see #1 TALK TO YOUR BANK. You may get this done on your own!
*please be aware that new rules govern modification in the state of WA. Please consult with one of our staff about these changes if you are seeking a modification in that state.