Veterans with Hardships Get Help on their Home Loans with Loan Modification
by Jerred Bulstrom, USMC (Ret.)
Recently, in the media, you may have heard the phrase “Loan Modification” and it sounded intriguing. But what is it and can it benefit you and your family.
Loan Modification is arguably the most effective tool you can use if you are behind on your mortgage and in midst of a financial hardship to save your home from entering foreclosure. With a loan modification, the mortgage loan is restructured so that it is affordable and can fit comfortably into your budget rather than being an overwhelming monthly drain on already tight finances.
Loan modification agreements come in different forms but quite frequently they involve the reduction of mortgage’s interest rate for a specified period of time so the homeowner can continue to make payments and stay in the home. Loans can also be modified so they have a longer amortization term (e.g. 40 year instead of 30 year) which will cause the payments to decrease.
In addition, Principal write downs can be obtained and are more common now, especially in this very rough market. The lenders are now willing write off some of your principal to keep you in the home. Why? Because, it’s stil less expensive for them to work with you than to take back the home and if writing off some of the principal will make it work, then they do it.
But what is the lenders incentive to work with you? Why do the banks want to renegotiate with you? What leverage do you have?
Well, that’s a great question. The short answer is that they will NOT negotiate with you until you have real leverage. Not the bluffing kind that you hear about but real genuine leverage that forces them to the table to renegotiate.
In most cases, the real leverage is that you have a true hardship that is causing you to be unable to meet the original terms of the loand agreement and its’ forcing your hand. In addition, professional forensic audits can also bring you leverage. Audits find errors and omissions or even, and now more common, fraud committed by one one or more of the vendors who were involved in the origination of the loan causing the loan to be placed in “hey this needs to go to court” status which is a the worst thing a lender wants to hear. Why? If a lender truly believes that a fraud may have been committed, they know that they will lose massive amounts of money and lost revenue while you get to stop making payments and stay in the house while the court drags on for months and months – many cases years. In other words, its costly to them and that gives you even more leverage to say “hey, let’s talk about this”.
The point of this article is that loan modification is a real tool for you to use to put yourself back in the game. And it could be for you.
For U.S. Veterans, the type of loan you have, whether it be a current VA Home Loan, FHA, Conventional or other, will define your best strategy on how to structure your game plan and making it happen.
So if you love your home and know you can afford it, but the current mortgage is threatening a loss of both home and good credit, contact me and I will listen and then counsel on what is the best strategy for you to get it going now!
Working with lenders can be a real pain, I know. But their is help out there for you now.
ABOUT THE AUTHOR: Jerred Bulstrom is a loan modification specialist with the Veterans Today Network and VA Home Loans Today. He served in both the U.S. Amry and United States Marine Corp based at Camp Pendleton serving combat duty in Iraq. He can be reached via email at [email protected] or by phone at 1 (619) 819-9360