Your Questions About Mortgage Loan Modification

Lisa asks…

Equity in home used to get a mortgage – is mortgage eligible for modification?

If somebody used the equity in their home to get a mortgage (home was paid off, except for $30,000, then home was refinanced with a $200,000 mortgage with $160,000 in cash going to homeowner, $30,000 to pay off the previous mortgage), is this mortgage eligible for loan modification? Or are only loans that were used to actually purchase a home eligible?

John answers:

It should be eligible for modification as long as the owner is the one living there. If it is an investment property, than no.

Chris asks…

Can I refinance after doing a loan modification?

I did a loan modification last year. Once again the mortgage is going up due to taxes making escrow go up. Can I do a refi? Also can I do another loan modification? I cannot make the new payment which is due next month.

John answers:

Whats your financial situation? Banks are willing to work with you just so you can avoid foreclosures and, so they can cover their backs. Banks could allow a 2nd loan mod depending on your financial situation.

Thomas asks…

How to submit qualifyable application for loan modification?

How do I submit an accurate, acceptable and complete application to my bank for review and consideration of loan modification?

John answers:

First of all contact some mortgage lender and get advise about how to apply for loan modification.

OR you can try some online mortgage lender where u just fill the form and then they will contact you and guide you about loan modification.

I know one online mortgage lender who provide loan modification services you can try here.

Good Luck…….!

Maria asks…

Does layoff qualify us for mortgage modification?

My husband was laid off from his job two days ago. Prior to this, we were considering refinancing (our current mortgage is at 6.625%). I am wondering if this layoff instantly qualifies us for some type of special rate/terms in a refinance or loan modification or if we should just continue with a conventional refinance? We don’t want to miss out on anything that would help us out financially, but we also don’t want to wait on something conventional only for rates to shoot up again.

John answers:

The layoff means that you probably no longer have the income to justify a refinance. Don’t be surprised if the re-finance is completely denied now that there is no (or less) income to support it.

In case you didn’t understand the last paragraph – you will not be able to continue with a conventional refinance unless YOU have enough income to do the whole refinance by yourself.

Loan modifications are generally only available to people who spend more than 31% of their gross monthly income on their loan payment. In addition, it is often an interest rate reduction only (not a modification of the principal balance). This might be your only hope to reduce your loan payments at this time.

I hope you have it, but this is why experts say to have 6-12 months of living expenses in savings, because your mortgage payments can come out of savings while he looks for a job.

Good luck!

Lizzie asks…

Does anybody know how to refinance after doing a loan modification?

I live in california. My loan is with Fannie Mae. I have done a loan modification a year and a half ago, but my principle loan was not changed and my credit was not harmed. My 30 year loan became a 40 year loan. So, I am trying to lower my interest rate by refinancing. Anybody know if and how this ca be done?

John answers:

As a mortgage underwriter I see this all the time. It’s quite common to refinance your mortgage after a modification and it makes no difference to the bank or mortgage company you are applying to. What matters is your payment history, I suggest contacting your current mortgage company to see if a HARP refinance is available for you. The HARP program has much more lenient guidelines and can possibly get you a much lower rate.

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