Contrary to popular belief, you can get a loan modification on a jumbo mortgage. There are some significant differences from getting a mortgage modification on a conventional loan, however. All banks have in-house loan modification plans that many times have better terms than HAMP anyway.
The great majority of borrowers who get mortgage loan modifications do so outside of HAMP, through private loan modifications arrangements negotiated with their lender.
Even if you have a jumbo mortgage, you’re not necessarily excluded from HAMP if you live in a high-value area. What matters is whether you have a “conforming” mortgage, i.e., guaranteed by Fannie Mae or Freddie Mac, as most home loans are.
The standard limit on Fannie Mae and Freddie Mac mortgages is $417,000, although until recently it went as high as $729,750 in areas with higher real estate values. These higher value “conforming jumbos” are still eligible for HAMP, but only if your mortgage was conforming to begin with – if your mortgage was originally for $900,000 but you’ve now paid it down to $400,000, you don’t qualify for HAMP, since your mortgage wasn’t guaranteed by Fannie or Freddie to begin with.
Private loan modifications
A private loan modification worked out with your lender is a real possibility. There is incredible pressure by the mortgage insurers to follow HAMP Net Present Value Calculations even for non-conforming loans. Foreclosures are very costly for mortgage investors. Only the mortgage servicers make a profit from foreclosure, so if you’re in genuine ‘imminent default’ and unable to keep up with your mortgage payments, it’s in their interest to work something out with you. The REST Report calculates what is in your and the mortgage investor’s best interest. That boils down to loan modification or short sale, period.
A loan modification has been standardized as new monthly payments that are 31% of your new, stable income, period. You can click the link to the right that shows the bank’s loan modification standards. The first step is to lower your interest rate and extending the term of your loan.
Banks are fond of offering forbearance agreements under the guise of a loan modification, Beware. But again, the REST Report prevents this treachery.
Themortgage servicer will agree to tack the missed payments (along with any penalties and additional interest) onto the back end of the loan, so your payments don’t increase and you don’t have to make up any deficits until the mortgage is nearly paid off. In some cases apparently, they may agree to waive penalties altogether, if that will help bring you back on a regular payment schedule.
Getting your lender to agree
One advantage that jumbo loan borrowers have when seeking a loan modification is that a foreclosure for them is going to be a lot more costly for the bank than a conventional mortgage would be – so your mortgage investor has an added motivation to work with you.
Supporting documents submitted along with the REST Report will make your case with your lender.
Contrary to another myth, it is not necessary to miss any payments to prove ‘imminent default’. As a result, some financially pressed homeowners start to skip payments deliberately, to try to force the bank’s hand. It’s a risky strategy at best – basically a game of chicken – and one that will do serious damage to your credit that will take up to seven years to recover from.
Getting a mortgage loan modification does not by itself harm your credit. Missed payments are what damages credit scores. For that reason alone, the sooner you get the REST Report, the better.
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The internet being what it is, certain search terms need to be empahasized so that you can find the best information. The REST Report is best classified as loan modification software, or mortgage modification software. It’s claim to fame is that you use it to calculate Net Present Value exactly the way the banks do, using the same software. It is best used as a do it yourself loan modification or do it yourself mortgage modification. For some reason, loan modification 2010 and mortgage relief 2010 are popular search terms.
This YouTube video says it all. Go here: How to Get A Beneficial Loan Modification Now Please ‘Like’ the video, will you? That makes it easier for others to find.
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