Why Choose
1st Financial Nationwide
For Your Loan Modification?
A Loan Modification can transform your existing loan into a payment you can afford.
With Representation We Can help:
- Lower your interest rate to a comfortable payment you can afford
- Stop foreclosure with a loan modification agreement
- Change the terms of an Option ARM mortgage
- Obtain a principal reduction or forbearance
We're ready to listen, it starts with a call...
Questions about... Home Loan Modification, Mortgage Loan Modification, Bankruptcy Loan Modification, Foreclosure Help, Foreclosure Assistance...click here
Loan Modification FAQs
Loan Modification FAQ's for Home Owners:
As if the possibility of foreclosure wasn’t daunting enough, the language and procedures of the mortgage and finance realm also can be overwhelming. Ferguson Financial has prepared some practical loan modification information and definitions of loss mitigation terms in real language for real people. We hope the following mortgage process information will be useful for you. Ferguson Financial believes that demystifying the loan modification process can go a long way towards reducing the stress of difficult times.
Loss Mitigation Definitions:
Loan Modification: A new interest rate, time frame, principle reduction or mortgage aspects are modified on an existing home loan.
Lien modification: The bank or mortgage company modifies the existing loan in such a way that it becomes possible for the home owner to qualify for a refinance with a new mortgage lender.
Loss Mitigation: This is a broad term that encompasses a variety of strategies designed to minimize the loss of loan monies for the lender, and the loss of assets for the home owner or other borrower.
Short sale: The lender permits the house to be sold at a price lower than the amount of the mortgage balance and forgives the borrower the balance of the loan. When no other loss mitigation strategies are possible, short sale will keep the borrower from foreclosure. With the severe drop in housing values all over the country, this has become an important loss mitigation strategy that is fair for both the borrower and the mortgage lender.
Deed in Lieu of Foreclosure: When the homeowner has offered the home on the market at a fair value for at least 30 days with no sale, the bank may choose to accept the property deed ‘in lieu of foreclosure’. The mortgage balance is forgiven and the homeowner avoids adding foreclosure to his credit history.
Homeowners Frequently Asked Questions (FAQ)
What kind of changes will happen in my mortgage with a loan modification program?
A variety of things can occur with a home loan modification, depending on the specific situation for each homeowner. An interest rate may be decreased; a new lower fixed rate applied; the time period for payment may be increased; the principle amount reduced; or any combination of these loss mitigation strategies.
How do Banks and other Lenders view Loan Modification plans? Would they rather foreclose on the home?
Banks and mortgage companies DO NOT want to foreclose whenever a fair and practical loan modification is possible. Especially in these times of rampant foreclosure, banks are more ready than ever to work with Homeowners on practical loan modifications to stop foreclosure or even prevent it from coming close. Contrary to popular belief, mortgage lenders are not looking to collect all the homes they can find, in fact, banks have many more house on their hands than they can manage. The average cost of foreclosure for the mortgage company is $50,000. It is almost always more profitable for the lender to work out a loss mitigation program with the homeowner.
Do I need to go through a mortgage broker to work with Ferguson Financial?
No, you can work directly with us as your loss mitigation specialists to walk through either step of the process.
I am a homeowner and I’ve just been serviced a foreclosure notice. How can I get help today with a loan modification solution?
We have a solution for you. Right now, you can Request a Review of your home loan from Ferguson Financial. One of our professional and compassionate loan modification experts will be in touch with you immediately to answer your questions and get you started with real and workable options that will keep you in your home. We’ll even recommend an excellent mortgage broker in your area from our extensive network of home loan professionals.
What if I received a notice of a sale date?
There is still hope but you must contact us today. The longer you wait, the fewer options you have.
What is a loan modification?
Simply put, a loan modification is a renegotiation of your loan with your existing lender to restructure the loan to meet your current financial situation.
A loan modification typically consists of 2 major components:
1- Interest Rate Reduction - We prepare your modification request and proposal to cut your rate significantly on the 1st and 2nd mortgage.
2- Loan Term - Typically, Lenders provide a significantly lower rate for 3 to 5 years, converting back to a conventional rate for the remainder of the term. In some cases, Lenders provide fixed rates with lower interest for the entire life of the loan.
Principal Reduction:
Pending passage of House Resolution 1106 (Helping Families Save Their Homes Act of 2009), homeowners that FILE BANKRUPTCY may seek relief in the total principal owed on their mortgages through a bankruptcy judge. To date, less than .01 percent of home mortgages have been modified with principal reduction as a major component. This practice may increase somewhat in certain instances where it is obvious to the Lender that Bankruptcy will become the Borrower's only option.
Foreclosures are bad for banks. They lose every time. Banks are not in the business of buying and selling property. With each foreclosed property comes an attorney fee, buyer agent fees, seller agent fees and the risk of the homeowner destroying the property before they leave. What does this mean for you? Your lender is motivated to modify your loan and help you stay in your house. With a modification, everyone wins!
How do I know if I qualify for a loan modification?
If you are behind on your payments, in foreclosure, soon to be in foreclosure, have received a notice of default or sales date, have an adjustable loan, have a negative amortization loan, a balloon loan, a first and second on a single property, or a high interest loan then you qualify.
Basically, anyone experiencing a hardship, in distress, or soon to be in distress qualifies. The larger the hardship, the more leverage the homeowner has! Remember, it is very expensive for a lender to foreclose on your property. It is in the lender's best interest to keep you in your home.
Why hasn't my lender contacted me or why won't they work with me on a loan modification?
With the market the way it is right now the lenders are focused on refinancing the loans that they can and making new loans which leaves them little time and resources to contact their existing clients. Simply put, they don't have the time or personnel to deal with your situation.
Can't I just do this directly with my lender?
You can, but it's highly recommended that you don't. Over 87% of homeowners fail in their attempt to modify their mortgage.
Why, do you ask?
For the simple fact, the average homeowner does not know the loan modification guidelines associated with their particular lender. In most cases they either show they make too much money to qualify for a loan modification or too little money. The guidelines for a loan modification are very strict and rigid. The reason so many people hire us to represent them we have over 12 years of experience in the industry. Unlike other companies, we have a copy of the loan modification guidelines for all major lenders and policy frameworks established by Fannie Mae and Freddie Mac.
Therefore, we know how to structure a file to get it approved before we even submit it. In some cases, if you go directly to the lender they will try to give you an option that will benefit them first, and you second. Most lenders that do some type of plan, only do a temporary solution that many times will put the homeowner right back into a hardship after just a few months. We provide a permanent solution that benefits you first and your lender second.
Our goal is to keep you in your home with a solution that will keep you from experiencing a hardship ever again. Your lender's goal is to make money on the loan.
How long does the process take?
With the amount of modifications being done today the average turnaround time from start to finish 8 to 12 weeks. What this means to you is that you now have 2 to 3 months to save money while you're not making a mortgage payment.
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