MORTGAGE MODIFICATION PROGRAM

The goal of this program is to take an unworkable mortgage and convert it into an affordable and sustainable mortgage. This will result in  actually increasing the real value of the distressed mortgage by rehabilitating it into a performing loan. In short, it is a win-win for both the homeowner who has fallen behind in payments and is facing foreclosure, as well as the lender. A fully rehabilitated mortgage can be switched into the “performing” category.

What is a Mortgage Modification?

If you are unable to make your mortgage payments or are very strained financially when doing so, and your home has declined in value, you are a possible candidate for a mortgage modification.  

In a mortgage modification, we negotiate on your behalf to reach an agreement with your mortgage company to change the terms of your mortgage to benefit you. The new terms generally are a more accurate reflection of the current situation and make the mortgage more affordable so you can continue owning your home.

However, mortgage companies may be reluctant to deal with your situation if you have ignored them, failed to return calls, left mail unattended to, and generally demonstrated a lack of interest in your situation. Their assumption is that you cannot be counted on as a partner in your mortgage. So, if you have been ignoring your mortgage company, don’t expect them to be very enthusiastic about trying to give you some concessions to help you solve your issue. They may show the same disinterest. Goodwill is a factor.

The incentive in a mortgage modification is to avoid the worst case scenario: foreclosure.  When an agreement can be reached, the mortgage company saves the costs associated with the foreclosure, brings the loan current and can deem it a performing loan. There is no requirement, legal or otherwise, for a mortgage company to agree to any modification, a Hope Loan or any other solution to a mortgage problem. Under ordinary circumstances, any modification of a loan or contract would require some basic consideration: an inducement such as additional cash, fees or payments. However, in the very grave peril facing many homeowners and many mortgage companies, the circumstances are far from ordinary and good deals many become available to you if you act to protect yourself and your family promptly.

WARNING: IF FORECLOSURE HAS BEEN COMMENCED BY YOUR MORTGAGE COMPANY BY THE FILING OF AN ACTION IN COURT AND SERVICE OF A SUMMONS AND COMPLAINT, YOU MUST ACT IMMEDIATELY IF YOU WISH TO PROTECT YOUR INTERESTS. ONLY A COURT CAN ORDER THE NEEDED ACTION TO PROTECT YOUR HOME IN THE CASE OF AN EXISTING FORECLOSURE ACTION. DO NOT WAIT EVEN ONE MINUTE BEFORE CONTACTING YOUR LAWYER.

Mortgage Modification vs. Hope Loan?

The same set of circumstances can trigger going after a Hope Loan, or a mortgage modification or some other remedial action to protect your home and avoid foreclosure. These circumstances include your inability to meet your mortgage payments on a timely basis and a noteworthy decline in the value of your home. The possible actions available to you include:

• Hope Loan - see tab at the home page
• Mortgage Modification
• Refi - see tab at home page
• Chapter 13 - consult your attorney

The differences between a mortgage modification and a Hope Loan are many. Under the Hope Loan program you attempt to obtain a new FHA backed loan with a 30 year term, and a fixed rate of interest (which cannot be adjusted up) by meeting the requirements of the program and reaching an agreement with the mortgage company for this new loan. The old loan then ceases to exist, and the new loan replaces it. This is quite different from the mortgage modification case. Under a Hope Loan you pay annual fees to FHA for insurance of the loan and you share gains or appreciation in value with FHA under a formula, but not less than 50% of the gains from the date of the new loan. The Hope Loan program is limited. It applies to mortgages prior to January 1, 2008. You cannot own a second home. You must share gains, if any, with FHA. Your mortgage company must agree with the deal. Your home must be worth less than your mortgage. You must be unable to meet the payment requirements. The new mortgage cannot be under $100,000 or more than approximately $550,440. There must be a new appraisal.  The loan has to be an FHA loan. And there are many more requirements.

The Hope Loan program is therefore more limited than a mortgage modification, which is a private agreement we negotiate as your agent, with your approval, between you and your mortgage company.

In a mortgage modification situation, the same loan continues on, but with beneficial changes so as to be more affordable. In neither case, however, is your mortgage company required by law to agree to the modification of a mortgage or to a new Hope Loan. Both programs are voluntary. Both parties are free to pursue any contractual or legal remedies available in the event it is determined by either party to not proceed with a modification or Hope Loan.  
What incentive is there to enter into either a mortgage modification or Hope Loan for your mortgage company like Chase, Countrywide, Bank of America, Indymac, or any of one of them?

According to JP Morgan Chase & Co. spokesman Tom Kelly, “the incentive lies in trading loans that might otherwise go to foreclosure for a smaller, more likely payoff.”* In short, whether you ultimately seek a Hope Loan or a Mortgage Modification, you are going into this process based on the self-interest of both parties.

How Does Our Mortgage Modification Work?

First, we suggest finding out if you qualify for a Hope Loan by clicking the Qualify Now button on our home page.

Second, if you do meet the Hope Loan requirements as shown by our screening tool, then it is probably in your best interest to work towards a Hope Loan because a Hope Loan will result in affordable payments, a 30 year term and a fixed rate of interest. That will be hard to beat. You can request our services in negotiating and obtaining the Hope Loan when you receive your email qualifying you for a Hope Loan.

Third, assuming you do not meet the requirements for the Hope Loan, then you may wish to pursue a mortgage modification. That would be better generally speaking than doing nothing and waiting for the foreclosure action to be served on you.

Fourth, go to the Qualify Now Tool, and enter the data you would enter for a Hope Loan, but check the box for MORTGAGE MODIFICATION. You will receive an email, which will contain some options. This only applies where licensed.