In 2004, I worked in a busy mortgage bank office that was overwhelmed by the volume of business coming in due to the extremely low interest rates available and booming real estate sales. We had a backlog of refinance filings that pushed closings past the 90-day mark. Many of the filings were simple no-cash refinances for borrowers who just wanted to take advantage of low rates. When the funding delays reached critical mass, we started losing business from some very good clients. Lucky for us, our main investor, Fannie Mae, took action and implemented the Mortgage Modification to streamline the refinancing process for those who just wanted to save some money.
Things were simpler then and our modifications required much less work and decisions than modifications to avoid foreclosure. Borrowers seeking rate and term refinances were given the option of a full refinance with usual fees at closing or a modification for a flat fee of about $400. Complete repair closed in approx. 60-90 days, change in 15-30 days. Everything was done in-house and we offered the service to eligible borrowers when they contacted us about refinancing. There were no intermediaries, no negotiations, and no grounds for arbitrary denials. A lot has changed since the boom days and nothing more than mortgage modifications.
Simplicity is an elusive concept lately, however I’ll keep this as simple as possible. If you apply for a mortgage loan modification, always deal directly with your lender or mortgage servicer. That’s it, follow that rule and you’ll avoid Mortgage Modification fraud. Of course, there is more you need to know to be successful. The lure of modification companies is their claim that they will properly create, package and negotiate a successful modification proposal with your lender, taking the task completely off your hands. If you go directly, you must create a proposal yourself based on the government’s “Housing Affordable Modification Program (HAMP)” guidelines to have a reasonable chance of success. HAMP guidelines are currently available at efanniemae.com, as well as several other places on the web, some are more concise and easier to read than others.
Why not just call your lender and get a mod loan application over the phone? Home loan servicers are overwhelmed with modification requests and are not set up to handle the processing or workload. They would prefer not to process modifications. Submitting a full proposal has a number of advantages, for example; the calculations are completed and known to you, most of the work is done by eliminating the common excuses used by servicers to give borrowers evasion, and you will have a copy of the full proposal and all supporting documents in case your administrator “lose” conveniently. your luggage Once you start the process, you should keep a call log of your communication, date and time, who you spoke with, and what was said. Be persistent and schedule follow-up calls.
It would be great if you could trust that you are receiving honest and professional effort from a company or individual advertising a modification service. The simple fact of the matter is that you can’t. That doesn’t mean you can’t get a favorable deal on a modification. It means you will have to do some work. Resources are available to help you with preparation and organization.
