Your Questions About Save Loan Modification

Ruth asks…

What are some better options before I foreclose on my house?

I had a custom house built in Boise, ID for $517,000.00 in a brand new subdivision. The prices range from 300 thousand-1.2 million. It’s in a great location but nothing is selling in the subdivision due to a large inventory of homes on the market in that price range. I feel into the trap and got an interest only, $0 down loan which makes my monthly payments over $4,000. including utilities. The house has been on the market since December of 06. I’m planning on moving out of state in October with no job lined up. I’m working all the overtime I can and I can barely make the payments. My money and time is worth more to me now then paying the monthly mortgage. I need more options before I foreclose on the house. Please help.

John answers:

The first thing you need to do is to contact your mortgage lender to see what options they can give you. Explain your situation and believe it or not, they do not want your house, especially right now in this housing market, with no equity in the home at all. They may be willing to work out a temporary forbearance agreement or a loan modification of some type. They also may give you the option of allowing a short sale. A short sale is where they agree to accept less than what is owed on your mortgage as payment in full so that you can sell your home for a lower price and it saves them the hassle of dealing with a foreclosure and it helps your credit better than a foreclosure would. Check out the pages below about tips on avoiding foreclosure.Best of luck to you.

Richard asks…

How long does the foreclosure process last and what are the stages? Is court first or are u just evicted?

i am about to be 4 months late on a Fannie Mae loan in Florida. I have already received a certified letter stating they can accelerate the loan if I don’t pay in full in 30 days!

John answers:

If you’re 4 months delinquent and it’s Fannie Mae, then chances are your property is not yet in Foreclosure – what is your intent regarding the home?

The plans put into play by President Obama are specifically for Fannie Mae and Freddie Mac loans. Have you called your servicer to apply for the help or to see if you’re qualified for the help? You can go to to read about the programs offered. You may qualify for a modification and be able to save your house, if that’s what you want.

If you choose to call your loan servicer (loss mitigation department) be prepared to provide them with your income/expenses. You may want to review this before you call to make sure that you are at least breaking even, have a small surplus or a deficit that isn’t greater than $500. You’ll want to have a contribution to apply towards your delinquency and it should be at least one payment or more.

If you’re intent on letting your home go to foreclosure make sure you educate yourself. You can google foreclosure laws + florida + fannie mae and come up with websites that will give you time frames from the intial delinquency, when the property and your credit will start to reflect foreclosure reporting, length of time between the initial foreclosure code to foreclosure auction and check to see if there is redemption in Florida. Also, once your account is officially coded Foreclosure an attorney will be assigned (you can get the information from the servicer) who will be able to go over what you can expect from coding to auction to eviction as well as the information you’ll want to know about the 1099 and what you can expect to pay in taxes if the foreclosure takes place.

Education is the key when making a decision like this – especially if you could possibly get your loan modified into something you might be able to afford. You won’t know if you qualify unless you try.

Good Luck

Lizzie asks…

Is there a person who got a good modification from countrywide?

loan modification

John answers:

Yep. I changed from a 30 year with 6.67% to a 15 year @ 4.25%. My payment only increase by $185 a month and I’ll save almost $100,000 in interest. Get away from the 30 year loans! I can’t believe I got one to begin with! With the 30 year I would have actually lost money on my house after I paid all the interest, taxes and upkeep.

Mark asks…

How can I save my second home from forclosure?

I have a second home that I was renting out but recently lost the renter. I can’t afford to pay the second mortgage because I was laid off. Up until this point my credit has been great. I might be a able to rent it out if I offer cheap rent but I dont think the bank will lower the mortgage payment with out asking for fee.

John answers:

Try to have a home loan modification and prioritize the payment of your mortgage. Debt management program will also help you a lot.

Mandy asks…

can I ask for a student loan modification?

I have close to $50,000 in separate student loans and I can’t keep up with payments. I want to work out a deal with the banks and try to modify the loan…is that possible? I know it’s sometimes possible with mortgage loans, etc?

John answers:


The closest thing to a student loan modification is a loan consolidation. A loan consolidation is really a new loan that pays off all of your old loans. The consolidation loan will have its own new terms and conditions.

One of the chief selling points of a consolidation loan is that you can choose a new loan with a longer repayment term. A longer repayment term will cut your monthly payment obligation – perhaps considerably, depending on the length of the new loan.

Keep one very important thing in mind. When you extend a repayment process, you generate a large amount of interest. You will be given longer to repay the loan – your monthly payments will decrease – but you will wind up paying a LOT more to the lender than you would have under the original loan. Make sure you understand exactly what the long-term financial ramifications of any consolidation loan will be. Don’t just get caught up in the “Wow!” factor of “look how much I can save every month!”

Right now, finding a lender to consolidate your existing loans will be somewhat challenging. If any of your loans are federal student loans, your luck will be considerably better. Here’s some information, from the US Department of Education on their own consolidation program: and

Private loans and federal loans can not be consolidated together – you would need separate loans.

Several lenders are still making consolidation loans for education – other lenders are not. If you are interested in consolidating non-government loans, I would recommend that you use for an up-to-date list of lenders who are still making consolidation loans to borrowers in your area.

Good luck – I hope this information helped.

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