Frequently Asked Questions

1 - What is a Loan Modification?

Loss mitigation programs were established by the federal government and the mortgage industry in order to stop home foreclosures. They help foreclosure victims in default on their mortgages to find alternatives to home foreclosure. Every homeowner's situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Our extensive experience and solid working relationships with mortgage lenders allow us to help you avoid the common pitfalls that many homeowners encounter while trying to work things out directly with their lender. After performing a thorough assessment of your personal finances and analyzing your lender's loss mitigation policies our professional loss mitigators will negotiate with your lender to get you the best possible solution to your professional loss mitigators will negotiate with your lender to get you the best possible solution to your home foreclosure problem. We can help you save your home and credit history through a variety of loss mitigation options.

2 - Who qualifies for a loan modification?

Anyone that is having trouble paying their existing loan may qualify for a loan modification. In today's housing market banks are willing to work with mortgage holders who are having trouble paying their mortgage. However, homeowners with a high probability of getting a loan modification are those currently in an adjustable rate mortgage, who have a high interest rate, and/or are experiencing any kind of hardship.

3 - Why modification and not refinance?

Current lending guidelines and the substantial drop in property values have caused borrowers to not be able to qualify for loans. Coupled with this misfortune, lenders are extremely wary of lending monies in this strenuous market. Loan Modifications DO NOT require good credit, strong reserves or equity in the property to qualify!!

4 - Why will it work for me?

The government has asked for ALL lending banks to help in the foreclosure epidemic and modify mortgages for all troubled homeowners. This system will automatically produce your Bank Ready Loan Modification Package. Going to your lender with a complete modification package, which was provided with instructions, will make a scary process seem simple.

5 - What if my credit is bad?

A Loan Modification is not based on credit. The banks are trying to make a good loan out of a troubled loan. The loan modification will not hurt your credit; generally only late payments or a foreclosure will negatively affect your credit score.

6 - What if I have no equity or I am upside on my home?

It does not matter! Some banks are doing a principal reduction, which means the bank will discount the total loan amount to the current value of your home or close. Most banks or lenders rarely do this.

7 - What if my income is too low?

You will need to show the bank that you and all others in your household together can afford the new payment. This is done within our Pre-Qualification step when you start the process.

8 - Why modification and not foreclosure?

First and foremost, a modification allows you to STAY in your home! We understand the importance and hard work it takes to achieve the American Dream of Homeownership, our goal is to enable you to stay in your home and get back on track to financial freedom!

In addition, the modification itself does NOT affect your credit report in a negative manner, it is simply a renegotiation of the rate or program by the lender. However, if mortgage lates were present prior to the modification initiation, those mortgage lates will remain on the client's credit report.

9 - Why does the Bank/Lender agree to Modify the borrower's loan?

A foreclosure is an extremely costly process for a lender. The lender will typically be forced to take a loss on the loan balance which they have lent (may range at $100,000 plus), they have to pay attorneys and real estate agents to list the property, AND they have an extremely negative asset on their books which in turn, will affect their stock price dramatically. A lender would MUCH rather reduce a client's interest rate than have to deal with foreclosure. THIS IS WHY they are so willing to help!

10 - Can I do my own Loan Modification?

Yes, you can attempt to modify your own loan however, we do NOT recommend doing so. Each bank has its own specific guidelines as to debt to income ratios, documentation, credit requirements etc. We do not expect you to understand the intricacies and requirements the bank has in order to make their determination on your file. The benefit of hiring is that you ensure the most expert review and packaging of your file to make certain you receive the best modification results.

11 - What should I expect the terms to be on my new loan?

Banks have rapidly changing guidelines for Loan Modifications. A bank will typically modify your loan into a loan you can afford and continue to pay. This may include a lower interest rate, payment reschedule, principal reduction, longer terms or any other modification that will make and keep the loan a "performing loan"?

12 - How much can I save by doing a loan modification?

You can save hundreds or even thousands a month, depending on your loan amount. Remember, a loan is typically for 30 years. So the Loan Modification that saves you $500 a month really equals $150,000 over the life of the loan.

13 - Does every bank do loan modifications?

Most all banks do some form of a loan modification today. We are in a housing crisis and most banks are willing to work with clients to help them save their homes.

14 - What is hardship?

The lender will attempt to identify the hardship in your current situation. Hardship simply means that you have been faced with recent difficulties which have caused you to arrive to your current situation. Some examples of hardship are:

• Financial Hardship (i.e. decline in business, severe drop of home equity, laid off of work”)
• Personal Hardship (i.e. recently divorced, illness, recent retirement etc)
• Recent payment adjustment, or future adjustment causing the mortgage payment to increase

Our legal team will help identify your hardship and relay this information to the lender when submitting your package.

15 - How long does the process take?

The modification process varies depending on the lending institution's turn times. The average time for a loan modification is typically 90-120 days.

Our staff strives to submit complete packages to the lender as quickly as possible so that the lender may begin their review. Unfortunately, once the file is submitted we must simply wait patiently and follow up with the lender consistently to ensure proper turn times are being followed and push for a speedy decision.

Why does it take so long?

The lending institutions are overwhelmed by the number of demands for loan modifications, short sales and foreclosures. In addition to this, the banks have experienced severe financial setbacks, leading to layoffs and an increased work load. Although the process may seem long, rest assured that our staff contacts your lender on a daily basis to follow up and drive the file to closing as quickly as possible.

17 - What are my chances of success working with you to get a forbearance?

We have relationships with virtually all of the large institutional lenders. We are experts at negotiating modifications because we know what your bank requires in order to achieve approval. USA Loan Relief proudly boasts an astounding success rate, thus ensuring a very probably chance of achieving the results you are in search of.

18 - Is this like refinancing?

No, Modifications are NOT refinances. Refinances require appraisals, title, escrow and Lender fees to be charged and often times can be very expensive. In addition, qualifying for a refinance is MUCH more difficult than qualifying for a loan modification. So, if you have bad credit or an imperfect payment history, little to no assets, or diminishing equity, you can still qualify for a modification.