How to get a home loan modification approved? Are you behind on your mortgage
payments? Maybe you know someone that is facing foreclosure. Well, hopefully we can
help. A loan modification, a mortgage modification can really help readjust
those mortgage payments so that they're affordable. But there's a process to it
and I'm going to show you how. Let's go.
I'm going to share with you the number 1 mistake that people make when applying
for a mortgage modification. Number 2, I'm gonna share with you the
step-by-step process that lenders take you on. The process that you're going to
have to navigate. I'm going to tell you all of the tips and tricks so that you
don't get tripped up. And then last but not least, I'm going to share with you my
secret to writing a hardship letter that actually gets your loan modification
approved. So, let's talk mortgages. Before we get into mortgage modifications or
home loan modifications, we have to first talk about a mortgage. So, most people
that own a home do have a mortgage payment, okay? And so, when you finance
your home, when you purchase your home, you went through a process where you
showed your income and your assets and your employment. And the bank approved
you and now you make a payment to the mortgage company each month. Well,
sometimes you're not able to make your payments. What happens if you lose your
job? What happens if there's a pandemic and your job is lost or you can't go to
work for many months? And now you can't make your payment. Well, millions and
millions of people are facing this as a situation. And so, lenders have a solution
for you. It's called a mortgage modification. It's where they will
readjust the payments, okay? They don't give you a new mortgage. They modify your
current mortgage payments so that is something that you can now afford based
on your new situation. So, when you first got your home for example, you had your
employment you had your job, you had your set income. But when something changes,
for example do you lose your job or maybe someone gets sick or your husband
dies or whatever the situation may be, you may need to do a loan modification
and lenders have that for you where they adjust the payments downward to make it
more affordable. Sometimes that is a temporary adjustment where they modify
the mortgage for just a month, a year, 6 months, a year, 12 months, 2 years.
Whatever the situation may be, it is based on your situation and you and the
lender can work through it. So now that we know, this is a solution for you. Let's
talk about how we get it done. So, a very important thing that you need to
know is the point of a mortgage modification is to avoid foreclosure,
okay? You do not want to get a foreclosure. You do not want to be
foreclosed upon. And that is where the lender will come and actually repossess
the home, they will move you, your family whoever is living there out of it. It's a
process that usually happens through the court system in most states. And it is
very, very detrimental to usually your emotional state to your family and to
your credit, okay? So, having a foreclosure and going through that process can be
awful. And this is the point of why you would want to modify your mortgage
instead of actually getting foreclosed upon. And for the lender, foreclosure is
just as bad. They are not looking or wanting to foreclose on properties. In
fact, they would much rather you continue making your payments and stay in that
home. Because for a lender, a foreclosure can also be very expensive, okay? They
have to remove you, they have to go through the court process in most
states. They have to pay to have someone maintain the property. They now have to
pay for the property. They have to pay the taxes and the insurance and getting
the grass cut and all of the things that goes on with maintaining a home, the
lender would now have to do. So, foreclosure is definitely not what you
would want or what the lender would want. So, this is why you need to reach out to
the lender. You need to know this is not what they want to do. And go into the
situation claiming that this is not what you want for yourself and let when you
speak to the lender. Let them know this is probably not in their best interest
either. So, that both parties are working towards a solution. That's the first step.
Have that initial conversation with the lender. And in that first conversation,
again, make your intentions clear that you want to stay in the property. That is
a very, very important aspect on a loan modification. Many people don't ever say
that. They don't make their intention known. And the lender doesn't think that
you are serious. So, when you call the lender and you say, "Hey, I'm in this
financial situation." Explain the situation. Also make it very clear your
intent to stay in the home, okay? You want to give them that security. You want the
the lender to know this is what you are intending to do and that you're trying
to work towards a solution. The next thing when it comes to getting
approved for a loan modification, you usually have to be behind on your
mortgage payments, okay? Usually it's 2 or 3 months. But if you come into a
situation where you've lost your job or you know that losing your job or your
income or your employment or sickness or whatever the situation is, is eminent, you
want to reach out and say that to the lender. You want to start having those
conversations and have that communication be open. Now, you do not
want to give too much information to the lender because they will use that
against you if they need to. However, if you stick to what I said just explaining
what the situation is really briefly --just the facts, you don't need to go into
long emotional stories. Just the facts and stating your intention to keep the
home, those are the initial conversations, okay? So, as soon as you get behind on
those payments or as soon as you feel like this is eminent, do not hesitate to
call the lender. Do not avoid their phone calls, do not avoid the letters. Be
proactive, be open with your communication. The worst thing that you
can do when you're trying to get approved for loan modification is ignore
all of their phone calls, ignore all of their letters. You know, pretend... You know,
change your phone number. Go off the face of the earth and then when they're about
to foreclose on you, call them up and beg them for a modification. That's not what
you want to do. You want to be the good person that is reaching out proactively
and starting the process so that it benefits you. After you have the
conversation with the lender, again, being proactive with them, you want to put in
an application for a loan modification. It's usually a very simple process. It's
usually not a very long process. They usually just have you write a letter
telling them what the situation is or they have a quick application for you.
Again, this is the first step. And once you have major intentions clear that you
can't pay... And this is your primary home. Again, this is not I'm not really
speaking for investment properties in this case. I'm talking about your
personal mortgage for your personal home. That is what is considered a homestead.
And in most places and in most states, there are lots of laws that regulate
your homestead. They don't want you to just be thrown out on the street and
homelessness, okay? And so if you're having these conversations with the
lender and you put this on record that you want to keep the home, you want the
loan modification and that you're unable to pay at this time and you put this
(again) on record with the lender, it will
usually stop the foreclosure process, okay? All you have to do is actually
communicate and make this known, okay? And put it on record whether it be on phone
on a recorded call or with your letter in your actual application. Put it on
record. Okay, okay. And this is super important. I have to take a quick detour.
Just really tell you. So, as many of you guys know Noelle actually used to work
in corporate America in mortgage banking. So, I was actually a VP at Chase and
Mortgage banking. I was in leadership at Wells Fargo, Bank of America. I've
actually held a lot of very high positions at most of your biggest
lenders. In fact, the big 3 I've worked at all of them as well as some
other mortgage companies. So, I can tell you from experience, okay? This is insider
tips here. This is what lenders are looking for. You have to submit your
documentation, okay? Now again, this is Noelle telling you an insider secret. Do
not give them more than what they ask for, okay? No less, no more. Exactly what
they asked for it. Because in most situations especially in the environment
that we're in now after the whole fiasco that we have in the United
States in 2009 with all of those foreclosures, they've changed lots of the
laws. And many of them are in the consumers favor, okay? They're in your
favor. I know. Trust me. I worked at a bank. They don't
tell you this stuff. They're never going to tell you these things but they most of
the laws are in your favor. So, when you submit just submit the documentation
that they're asking for, do your best, okay? Don't just not submit something. If
they ask you for something and you don't have it, submit a piece of paper that
says do not have. You like upload it to their system literally. That is a trick
that you want to do. Do not just not submit something because they can look
for reasons that you didn't submit documentation in order to deny your loan
modification. But as long as you are willing and actively taking their calls
and giving them the stuff that they ask for, in most cases, they have
you look at it and approve you, okay? Additionally, if for some reason your
longer your modification is denied, I'm going to tell you exactly what to do
because there is a secret to it. So, the big secret with most loan modifications
is that hardship letter, okay? So, yes. They are looking at your income to make sure
that you can repay the loan. So, if you have like no income at all and you have
no job prospects, there are things that they can do where they can put you in a
forbearance where they suspend your mortgage payments until you find a job.
And then they can give you a loan modification. But again, your intention
has to be really clear that you want to stay in the property. It is your
homestead and then you write a very compelling hardship letter, okay? And your
hardship letter is the reason why you got into the situation where you need
the modification. What is your hardship? What are your extenuating circumstances,
okay? And this is a big word that lenders use but most people don't know what it
means. They want to make sure this is a one-time event. If you make a letter and
you start talking about your financial mismanagement or mistakes that you made,
do not do that. Do not. Do not take any of the blame, okay?
I know this sounds crazy but really don't take any of the blame. You want
your hardship letter to talk about external factors like the economy, like
your job. Downsizing, layoffs, things that you did
not have control over. Extenuating circumstances. Things that don't happen
all the time. Someone got sick, someone died. Something like that. Stay focused on
that. Do not say "My husband ran off and then I had to use my credit
cards and then I did this." No. Try not to take any of the blame. But be
responsible in what you're going to do going forward. That's the key. I know I gave you a lot of
great information. Please make sure you watch all of the videos in this playlist.
Noelle is here every single weekday providing these content for free. Almost
like a free course right here for you. So please go ahead
this video. Comment below if you have any questions about loan modifications. Like
I said, I have not only master's degrees and MBAs and all this great stuff. I also
have a lot of experience working in the mortgage banking finance. In fact, all
the way from starting at the bottom moving all the way up to... So, I know a
lot of information. So, ask your questions. I am here to help you. This is Noelle.
To your success.