It is not well known that every lender has an in-house mortgage modification option. It’s even less well known that many of these plans are more beneficial to the distressed mortgage owner than the publicized, and inefficient Home Affordable Mortgage Plan, or HAMP, from the federal government. The homeowner needs to enter the mortgage modification negotiation well informed as to the options of their mortgage modification application. Without the REST Report the bank will offer a mortgage modification that THEY think you can afford; not necessarily what is beneficial or affordable to the distressed homeowner.
Along comes USA Today with an article about how many of the pitifull few who are getting mortgage modifications are getting in-house modifications rather than HAMP mortgage modifications.
The key here is to show the lender that it is in THEIR best interest to modify a distressed mortgage. (The REST Report). The mortgage counselor featured in the article points out to her clients that many times the lender in-house mortgage modification plan is better than HAMP. She tells them they’re far more likely to qualify for an alternative modification with their lender that also lowers monthly mortgage payments.
Every time one turns around there are differing stats of the dismal mortgage modification numbers. Still, this article says that in 2010, servicers completed more than 800,000 alternative modifications with borrowers, according to Hope Now, a consortium of counseling agencies, servicers and investors. Since its start in spring 2009, HAMP has produced only 389,198 permanent modifications through June.
It’s imperative that the distressed mortgage owner have a solid idea of what to expect going into mortgage modification negotiations. A beneficial and affordable mortgage modification will be a new monthly payment roughly 31% of the new, stable income – for an extended period (years, not months).
•Lower monthly payments reduce default rates.
•Newer modifications are showing better results.
•Eligibility standards for HAMP modifications aren’t clear-cut or applied consistently. This has been repeatedly pointed out by the federal Investigator General for TARP, or the Bush-era Troubled Asset Relief Program.
Some borrowers may have to pay fees to get an alternative modification.
Servicers make more money doing short-term modifications than they do under HAMP. A forbearance is not a modification. Apples and oranges.
Other differences between an alternative modification and a HAMP modification also can be significant. Under HAMP, participating servicers are required to reduce the mortgages to 31% of borrowers’ gross monthly income, and if they keep up their payments for a three-month trial period, they’re supposed to be able to keep that modified mortgage for five years. Some alternative modifications may help the borrower for only a period of months.
Stories and anecdotes of mortgage modification applicants AND bank administrators losing files are legion.
Those who owe significantly more on their homes than they are worth on the market may be able to get the principal on their loan reduced over five years. Unemployed homeowners may be able to defer payments for three months and then go into a modification plan if they’ve gotten a job.
In the wake of the Foreclosuregate/Robosigner scandal exposed last November, the newest strategy is to sue your lender for chain of title. If your mortgage servicer didn’t file all the necessary documents, they aren’t entitled to foreclose on you. How about a free house? Read it here
Apparently opinions vary greatly as to the benefits of so many mortgage modifications being outside HAMP. But if it’s your mortgage getting modified,I’m thinking you’re unconcerned about that.
If the reader believes anyone, anywhere when they hear someone say that the bank wants to work with them as a distressed mortgage owner, they need to go back to junior high school and take every juicy bit of gossip they ever heard as gospel truth. Sheesh.
I am a proud vendor of the REST Report. I also have the proven best hardship letter template anywhere. Guaranteed to get the undivided attention of the most cold-blooded mortgage underwriter anywhere.
Click to read more about your Do-it-Yourself Mortgage Modification REST Report
This YouTube video says it all. Go here: How to Get A Beneficial Mortgage Modification Now
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