Nothing is worse then falling behind on your mortgage payments. One, it is just something that we, as real estate investors, don’t like to do because we are honest hard working entrepreneurs. Two, you start getting phone calls from the lender and three, your credit score gets hit. However, there is an alternative to foreclosure other than going through a short sale. It is the loan modification.
A loan modification is just changing one or more of the terms of your loan contract. Although a loan modification can be done when you are up to date on your payments, it is much more difficult, than when you are behind on your payments and want to stop foreclosure.
Since we have all been in the process of qualifying and obtaining a mortgage, then we all know the basic information that is going to be required by the lender. Basically you’ll need your financials, such as pay stubs, bank statements and the most recent year’s taxes. But before, gathering up all that information, call the lender and get pre-approval. The pre-approval process is just the lender’s way of making sure you can’t meet the current payments, but could meet them if the loan was modified.
Notice I haven’t mentioned using a third party vendor for this process. I have heard there are companies out there that say they will help with your loan modification, but all they do is take your up front money and don’t get the modification. However, I have not researched this topic enough to know for sure. I have even seen signs in my neighborhood for loan modification companies that charge about $1500-$2000. So, all I can say about this is, like when you purchase a real estate investment property, do your due diligence!
Remember to always take action, and always follow up with the lender, when doing a loan modification. Staying on their case is going to get you help you avoid foreclosure and get you much closer to approval.
Good Luck and happy hunting!
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This is a great topic and I think that many people still do not understand the help that is available or how to get it. And telling people to take action is definitely the right thing to do. Sitting around pretending the bills and notices are not there is not the right thing to do. Keep up the good work!
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