Mortgage Modification Attorney

Factors Which Affect the Mortgage Modification Outcome

There are many factors which affect the modification outcome. Some factors outweigh others. Some factors have more weight when they are pared with others. I will list the factors and make some generalizations, but I emphasize that no specific outcome can be guaranteed.

The following factors tend to make a successful modification more likely:

• If your loan is against a property that is owner occupied.
• If you have a loan owned by Fannie Mae or Freddie Mac or if your lender has taken TARP money from the FED and is therefore obligated to cooperate with the Obama plan. To find out if your loan is owned by Fannie Mae, click here. To find out if your loan is owned by Freddie Mac, click here.
• If you have a financial hardship.
• If you owe more on your mortgage than your home is worth, often referred to as “having negative equity” or being “underwater.”
• If your house has defects and will be costly to repair.
• If you can only sell your home by working out a short sale.
• If you are behind on your mortgage payments because of a hardship but have not ceased trying to make payments.
• If you can convince your lender that you can make your payments provided the arrearage is added to the loan and the payments are reduced.
• Generally, if you can convince the lender that if you get a modification you can keep up with the payments.

You do not have to be behind on your mortgage payments to achieve a modification, although this is a factor that may strengthen your position, especially if other factors are present. Never quit making payments altogether. Always try to make some payments. You do not want your lender to think that you will be unable to keep up with the payments if the lender gives you a modification.

If you work directly with your lender, you will talk first with Customer Service. Customer Service may tell you that you must be in arrears to get a modification. Customer Service will say this because they are only interested in getting you to make payments. As long as you are current, customer Service may not be interested in helping you. Maybe they do not know any better.

Once you make application and get past Customer Service, the Loss Mitigation Department will not be telling you that you have to be behind on your mortgage to qualify for modification. The guidelines require that you be in default or likely to go into default.

It is possible to get modifications on a property which is not owner-occupied or on a home where the loan is not owned by Fannie Mae or Freddie Mac, however, the lender is not obligated to cooperate, and the modification you get may not be as good.

If there is substantial equity in your property after paying off your first mortgage and your secod mortgage if you have one, then your lender is not obligated to cooperate with modification – even if your home is owner occupied and even if your lender is part of the Obama Plan, aka Making Home Affordable. If you lender will make more money by foreclosing than by modifying, your lender can foreclose.