| Article Index |
|---|
| Does your loan modification follow the Obama plan? |
| Page 2 |
| All Pages |
Last week we received several offers of Loan Modification from different banks. Some are in compliance with the Obama plan while others are not. In one offer, we received a reduction in payment of about $1000 from the original mortgage payment. They based the new monthly payment on the gross income of the spouses multiplied by 31 percent. The resulting mortgage payment of $2,475 includes property tax and home insurance of $850.
The offer from another lender is a choice of three monthly payments which reduced the interest rate from 8.94 percent to 4 percent resulting in a reduction in monthly payment from $4,770 to $2,000 or a reduction of $2,770. The lender is not a participant in the Obama plan.
Someone consulted me showing me a loan modification prepared by a foreclosure consultant that increased his monthly payment by $200. He asked me if he should sign it, and I said no way. The purpose of loan modification is to reduce monthly payment and yet this one will increase your payment. I told him that he should go back to the lender and ask for the loan modification that follows the Obama plan.
Question: If the lender’s first offer of loan modification is a small reduction in monthly payment, do I have to accept it?
Answer: No. If you can explain to the bank that you cannot afford the monthly payment they will make a second or third offer. Loan modification is negotiation. The bank will always offer you a small amount of reduction if you do not know how to negotiate. However, you need an attorney whom you can talk to if you are near foreclosure because the bank may foreclose your property and you may not know your rights. You need the necessary tools to negotiate such as a finding of predatory lending based on loan audit.
Question: What is the best time that I should contact an attorney?
Answer: The best time to contact an attorney is when you start the loan modification process. You can get more reduction if you negotiate early because you are not pressured for time to accept their first or second offer. In addition, you have more time to secure an audit of the loan so that you can bargain for reduction in principal if there are federal law violations and predatory lending. You should be able to see your attorney and talk directly to him or her about your case because your home, your most precious asset, is at stake. Your attorney should communicate with you and be reachable when you have questions.
| Comments |
|
3.26 Copyright (C) 2008 Compojoom.com / Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."
| < Prev | Next > |
|---|
