Better chance / Possible Loan Modifications
In the previous post I focused on what loan mods are hard or impossible to do. Here is a list circumstances with a higher chance of being approved for loan modification. These are middle of the road situations for which the lender may consider modifying the loan.
Possible Loan Modifications
- The lender has offered a rate freeze, the customer did not request the rate freeze, the loan is behind, and there is a hardship.
- The customer has a low rate mortgage and is behind on the mortgage payment due to unemployment, and can qualify without unemployment income. When this is possible, it may be possible to get an exception.
- A low fixed adjustable that is an interest only loan may not be beneficial to modify, as a fixed rate will probably be higher. After an adjustment and hardship, it may be possible to get a rate freeze for five years and a low interest rate, depending on the hardship.
- Fixed rate loans with an interest rate of 7.5% or lower that is not late or has not adjusted can be difficult to do.
- Non-owner occupied properties inhabited by close, dependent relatives need a lot of documentation, but are possible depending on the lender. They take a lot more work
- Lenders are tough on non-owner occupied properties.
- Option Arms with high interest rates.
- Owner not behind in payment. Banks love getting paid and like to keep things like that. It is tough for a homeowner to stop paying. Very soon not paying can become an irreversible situation.
- Second home that is not a rental.
