Applying and getting a Boston mortgage loan modification application accepted in the Greater Boston Area can be strenuous, time consuming, and require a lot of effort from your part. If you are ready with all the necessary documentation, go to your mortgage lender well prepared. It will make the job of the lender easy and will increase the chance of your application being accepted.Incentives For The Mortgage Lender To Change Your Loan
Boston Mortgage loan modifications can be thought of as a win-win situation for both the parties involved. While you will get a modified loan that allows you to keep making the payments and keep the home, the lender will continue to have a constant stream of income. Lenders hate foreclosure since the time and effort they will have to invest in the property to sell it is very high. Most of the times they will not make a major profit. Therefore, it is in the best interest for both you and your lender if a foreclosure procedure is not started.
Other than the above major reason of no foreclosure, the lender gets a number of incentives because of the government’s Home Affordable Modification Plan (HAMP). To name a few:
- Pay For Success: The government pays $1000 for every modification, which meets the necessary requirements, established by the mortgage loan lender. In addition, another $1000 is given for every year you the borrower stay current on the re-worked loan (for a period of 3 years maximum).
- At Risk Loans Modification Incentive: Another $500 is provided to mortgage lenders for every at-risk mortgage loan they modify i.e. modify the loan before the borrower falls behind on the loan.
- Reserve Insurance: The government also provides lenders with partial insurance to discourage the practice of foreclosing on a property because of a fear of a huge drop in the properties market price in the future.
Mortgage Loan Modification Process
- Check Eligibility: Primarily check if you meet the necessary requirements for a mortgage loan modification. If not then it makes no sense in trying to get yours modified, since the chances of this happening are very small (think of refinancing or selling your house).
- Gather All Necessary Documents: If you find that you meet the necessary requirements, then the first step in the process is to collect all the necessary documentation. So collect your pay stubs, income tax returns, owned assets information, all credit cards information (monthly payments due and account balances), information on other debts such as student loans and car loans, information about any second mortgage.
- Write A Letter Of Hardship: Once the documentation part is done, write a letter to your lender explaining your current hardship, the problems that caused your income to be reduces or your expenses to increase. Next, collect documentation to prove this.
- Call Your Lender: Once you are prepared, call your lender and ask to be considered for HAMP. Then honestly explain your current predicament to your mortgage lender and supply all of the information and documents asked.
- Keep In Touch: It will take up to 6-8 weeks for the lender to analyze your application to determine if you truly are in a financial hardship, if you are eligible for the modification. So keep in touch with your lender and supply any additional paperwork or documentation if required.
As you can see, mortgage loan modification is not the easiest road to go down. However, if you persist and do everything right, then you will get a modified loan that will allow you to keep the home that you love.
Lender Tip: Contact us if you need to modify your loan.