Step 1 Determine available options
 

Getting your lender to communicate and negotiate with us is the first step. Your authorization will allow the lender to communicate with us. It will let us get the name of the investor for your mortgage and the available loss mitigation options. Once we know your lender is open to a short sale we will help you prepare a loan modification application. Generally, it takes 2 to 4 business days from the day we fax your authorization to your lenders before your lender can communicate with us about your mortgage.
 

Step 2 Prepare Application and Submit Application
 

The non-refundable $500 loan modification application fee is due only when your Lender confirms they are open to a modification for your mortgage. At that point we will begin helping you to prepare a loan modification application. It generally takes 20 business days from the time a Lender receives a complete application, to assign your application to a negotiator for review.

Application Preparation
An application must meet both regulatory requirements and lender loss mitigation guidelines. The guidelines vary from lender to lender and for individual mortgages. Lenders modify mortgages on a case by case basis and we will assist you in preparing a:

• detailed personal financial statement.
• hardship letter
• arms length sale certification
• short sale request
• seller’s estimate of value

Hardship Letter
There must be a hardship to qualify for a loan modification. A Borrower is considered to have an involuntary inability to pay if he or she does not have the ability to make the monthly payments. Hardships are based on an involuntary reduction of income due to:

• Business Failure
• Casualty Loss
• Unemployment
• Curtailment of Income
• Distant Employment Transfer
• Death in Family
• Death of Mortgagor
• Illness in Family
• Illness of Mortgagor
• Divorce or separation
• Military Service
• Interest Rate and Payment Adjustment
• Fraud

Feedback about your hardship letter is important. You can count on us to give you useful feedback in reviewing your hardship letter.

Application Submission
Once your application has been prepared, it will be sent to your lender. Every page on the application will be identified with your loan number and name. Two important tasks remain after the application package has been sent to your lender.

Confirm receipt of the application
Lenders often lose or misplace documentation. Follow up calls are made to the Lender requesting verification they have received the documentation and have included the documentation in their file. Missing documentation is resubmitted and reconfirmed. Often, several calls must be made until we get confirmation your documentation was received.

Verify completeness
As loan modifications are approved on a case by case basis we will confirm the completeness of the application with your Lender. Should additional documentation be required, we will help assemble it, transmit it and verify it has been received.

Transaction log
Every interaction with the lender is logged into our system. A detailed record of the date, time and contact person is maintained for application. The log prevents your lender from fostering misinformation while allowing us to enforce the lender’s commitments. It prevents lost time from conflicting directives and information by individual lender employees.
 

Step 3 Getting the lender to focus on the file
 

Lenders are overwhelmed with loan modification requests. Lenders are dealing with almost 8,000 foreclosures a day. The total number of requests for loan modifications is much higher. Many loss mitigation departments have to deal with more than 10,000 fax messages a day. Getting the lender to focus on your specific file is a vital part of the short sale process. Two techniques to get your lender to focus on your file are the Qualified Written Request and a forensic audit of the mortgage.

Qualified Written Request
The Real Estate Settlement Procedures Act provides for a privileged communication between you and your lender. It requires the lender to respond within 20 days of the receipt of your request. Used in conjunction with a regulatory hardship, a qualified written request can:

• Force the lender to accept an application for loan modification

• Force the lender to focus on a application for loan modification

• Suspend, delay or stop foreclosure activity

• Suspend the requirement of the borrower to make mortgage payments

Forensic Audit
Often, there are TILA and RESPA violations in your closing documents. Making the lender aware of the violations helps to create focus for a loan modification application.
 

Step 4 Application Acceptance
 

The next step in the process is to get the Lender to accept the application for a loan modification.   Generally, it takes up to 20 business days from the time the application is accepted for review for the Lender to decide if a borrower and mortgage qualify for a modification. Often, with the acceptance of a modification application, a lender may suspend foreclosure activities. This removes the threat of foreclosure and allows the borrower time to complete the modification without the threat of foreclosure.
 

Step 5 The Modification
 

Pre-Modification Payment Plan

For most mortgage guidelines, qualifying for a loan modification requires the mortgage to be current and a current on time payment history for the loan. This is accomplished by using a special forbearance plan. It will allow the loan to become current and create an on time payment history for the mortgage. The forbearance plan has two features:
• A monthly payment the borrower can afford.
• Four to six payments.
• A balloon payment for the balance of the arrears.
The monthly payments create the necessary on time payment history. The balloon payment brings the mortgage current. A second payment plan may follow the first payment plan. The second plan generally has a monthly payment very close to the payment in the modified mortgage.

Mortgage Modification Agreement

Everyone knows ‘it’s not over ‘until it’s over’. Expect our support to continue until the final modification is signed. Lenders are plagued with confusion and mismanagement even at the close. Count on our help to be certain the final mortgage terms are consistent with prior agreement and understanding.
 

Modification Review
Hidden, new and additional lender fees sometimes find their way to a loan modification. Making certain the modification is consistent with the commitment the lender has given us will protect you.
 

Lender's Modification Fee
Some final agreements may include a Lender processing fee.  Generally, the processing is between $300 to $500.