pramod asked:


One of the biggest mistakes homeowners often commit is that they try to hide their ailing financial status from others, including the lender. It is important to highlight the fact that foreclosure proceedings are an expensive initiative for lenders and given a chance, they’ll always be keen to avoid it themselves. So, the very first thing a financially distressed homeowner needs to do is to appraise the lender of the situation and seek assistance. Before contacting the lender, a true, unbiased assessment of one’s financial state and income must be made - this shall ensure that the loan modification arrangement is based on a firm foundation and the homeowner shall not default even after loan modification. Such financial analysis can also be sought free of cost from a nonprofit counseling service. Some such counselors may also offer to help in negotiating a loan modification with the lender. However, the best way to go about things is trust loan modification experts like Service Loan Modification, who ensure the best outcome for their clients.

Thereafter, the homeowner must contact the lender and share his/her problem and request for a realistic solution. The homeowner must also be ready to face many questions about how he or she proposes to pay off the loan over time. It is important that the homeowner expresses his willingness and ability to pay a certain amount every month, and has the lender consider the loan modification request. In case the homeowner has concrete reasons to believe that his/her financial situation shall improve soon, he/she may request the lender for forbearance or payment postponement till a certain date.

If the homeowner has been unable to meet higher monthly payments due to an adjustable rate mortgage that reset, he/she can request a loan modification from the lender. The lender shall seek the complete financial history with details of income and monthly expenses. A loan modification, switching the adjustable rate mortgage to a fixed rate mortgage, may only be considered if there is a positive gap between the homeowner’s monthly income and expenses. The homeowner should share any current or prospective sources of additional income confidently to secure a loan modification from the lender. Casual and uncertain requests for loan modification are unlikely to be taken in positive light and get lender approval.

It is best for financially distressed homeowners to seek professional guidance and services from experts like Service Loan Modification, who specialize in negotiating credible loan modification arrangements with banks and lenders.