Who Qualifies for a Home Loan Modification?

What is a loan modification?  Simply put, a loan modification is when an existing mortgage is modified and new terms of the mortgage are written. The changes are permanent and one or more terms of the note can be changed. For example, a loan modification with our attorney groups can (and usually does) result in a change in interest rate, change in payments (lower payments), and/or change from an ARM to a fixed rate mortgage. 

Assuming a homeowner is in default on their mortgage (over 3 months late), what are their options for staying in a house? A homeowner in default has three basic options for keeping their home. These are also knows as three different “workout options”. These are: 

1. Reinstatement

2. Forbearance Agreement

3. Loan Modification 

Reinstatement– This is where a number is calculated to determine how much money the homeowner needs to come up with to pay back all of their back payments, late fees, attorney fees, back interest, etc. For example, if a homeowner had $1500/month payments, and they were 5 payments behind, then it would not be uncommon for the reinstatement figure to be about $10,000. Very few people have the ability to come up with $10,000 to reinstate their mortgage, especially if they are behind in their payments. 

Forbearance Agreement – This is where the lender will take a portion of the reinstatement figure up front and have the homeowner pay the rest over the course of the next 6 months or so. In the above reinstatement example, the lender might require the homeowner to come up with $5,000 up front, and then pay out the rest over the next 6 months, resulting in payments GOING UP to $2,000 per month or more! It is VERY rare that a homeowner can afford a forbearance agreement as a workout option.

Loan Modification– This is the option that most homeowners are able to afford. With a loan modification, the lender will “re-write” the note, which will typically result in the payments going down! How much the payments go down is determined by the ability of the person negotiating the loan modification on behalf of the homeowner. Although nothing is guaranteed, it is not uncommon for us to see successful loan modifications with:

• Interest rates: 4%-6%
• ARMS modified to 30 year fixed rate mortgages
• Payments reduced significantly (depends on interest rates)
• Foreclosures stopped 

There are four different ways for a homeowner to complete a loan modification, with differing associated costs. Those ways are: 

• Homeowner does loan mod on their own – Free
• Government agency – Free
• Investor specializing in loan mods – Fee based
• Attorney Groups – Fee based 

Let’s go over how these different methods work, and the statistics associated with each of the methods. 

Homeowner– Statistically, when a homeowner does his or her own loan mod, the success rate of getting it done is 40-50% and it statistically takes 8-9 months. Sure, the loan mod is free for the homeowner if he/she does it for themselves, but you also have to remember that, even for those that get done, the rate of default from the loan mod is 80%... so 80% of the successful loan mods go back into default. And one more thing to consider are the terms of the loan mod. Is the homeowner getting the best possible rate with their loan mod? What are they being charged by the lender to do the loan mod? 

We all know that we can represent ourselves in court, but we would never trust ourselves to do that, because we know that an attorney can do a much better job. The same holds true for loan modifications and for something as important as keeping ones house. 

Government Agency– There are government agencies that will help a homeowner do a loan modification, and they are free. The founder of this loan modification program, personally, has worked for the government for 11 years on active duty military, and is still a reservist. He knows how government agencies work (especially free ones!), and there is no way, personally, that he would trust his home, loan modification, and/or future to a free government agency. That’s his personal opinion and in no way is the view expressed by the entire loan modification industry, it’s parent group, or any of the attorney groups associated with it.  

Investor Specializing in Loan Mods– A homeowner could have an investor do the loan mod for them. Even investors who have the right intension, know what they’re doing, and work hard at it are still only 50-60% successful at getting the loan mod done. 

Attorney Groups– Attorney groups are 90% successful at getting loan mods done. The attorney groups that we have are 97% successful, and they only take 30-60 days to complete! And as was already mentioned, the terms of these loan mods are typically outstanding with a resulting interest rate reduction, lower payments, foreclosures stopped, and terms that the homeowner can continue to make their payments with! 

How Does It Work?

 Here’s how the typical loan modification works.

1. The homeowner needing the loan modification is identified and agrees that a loan modification is best for them.

2. A 35 question “Quick Qualification” (QQ) form is filled out online by the representative who is helping the homeowner.

3. That QQ is evaluated by one of 9 attorney groups who will “accept” or “decline” the file. An answer is received within 48 business hours.

4. If the file is accepted, the representative is e-mailed a packet that needs to be filled out and e-mailed or faxed back to the attorney group. Also included in the packet is a payment form for the homeowner.

5. Upon receipt of the packet and payment, the attorney group begins work on the loan modification.

6. 30-60 days later the actual loan modification is complete and the homeowner begins making their new payments.

Can Homeowners in Default do a Loan Mod?

Yes, any homeowner can apply for a loan mod. Both homeowners that are current on their mortgage as well as those who are in default can successfully get a loan mod done for them. The only requirement is that if a homeowner is in foreclosure, the attorneys need a minimum of 12 days prior to the foreclosure sale so they can get the foreclosure stopped.

Realize, however, that each lender has it’s own requirement, and some lenders will require that the homeowner be 30, 60, and sometimes 90 days behind before they will do a loan mod. It’s unfortunately, but it’s how the system works.

How Much Does the Loan Mod Cost the Homeowner?

There is a fee for the homeowner to do a loan mod. Before we go into that, let us consider the costs of a foreclosure. If a homeowner is in default and will be foreclosed on if the loan mod is not successfully done, there will be many costs associated with the foreclosure, including:

• - Cost to Move
• - Security Deposit
• - Moving Van/helpers (general moving expenses)
• - Cost of trashed credit (higher interest rates, need to prepay, etc)
• - Cost of renting storage space (very common when moving from house to apartment)

Those costs add up very quickly and usually end up being several thousand dollars (conservatively $5,000 - $10,000; and that does not even include the emotional cost of having to move and the lost wages because of time you would need to take off work to get yourself moved and moved inot your new place!).

In addition, many homeowners are in default and not making their mortgage payments. This money could be saved and spent on the loan mod to help the homeowner keep their house.

The national average, nationwide, of a mortgage payment is approximately $3,000. 

 Our cost, for a loan mod is $2,695.

This cost includes one or two mortgages if both mortgages are with the same lender.  If there is a 2nd mortgage with a different lender, the cost for the 2nd mortgage is an additional $1,000.

Let me ask you another question. Would you ever represent yourself in a court of law? We all know that we COULD represent ourselves, but what usually happens? The other side has an attorney or some trained professional, and the person who shows up without an attorney on their side usually ends up not getting what they need or want out of the deal, right?

The same holds true with loan modifications. That is why we have hired attorneys to help all our clients do the loan modifications. With an attorney on your side, your odds of winning go up considerably. Our attorneys are 97% successful at getting these loan modifications done. They go after the lenders from every angle to make certain that you, the homeowner, get your fair share. They make certain that whatever the best interest rate is that the lender can give you, that you get it. If that’s 4%, you’re going to get it. Would you agree that it’s a very good idea, in fact it’s critical that you have an attorney on your side?

Attorneys nationwide are charging as much as $3,000 to $5,000 to do loan modifications, which actually is not that bad of a price when you consider everything we just discussed (up to 10 grand to move and the critical need for an attorney on your side). We were able to negotiate a special price for our clients, and remember it has a 100% money back guarantee, and on top of that, we’re seeing that our clients are getting their money back over due to reduced mortgage payments. The price for our attorneys to represent you with your loan modification is $2695 (with an additional $1000 if there is a 2nd mortgage with a different lender).

If you do not have the ability to pay the attorney's fee, we will not submit your file as we do not wan tot waste the attorney's time (or your time).

100% money back refund policy:

The refund policy is for the actual loan mod. If the loan mod gets done, there is no refund. If the homeowner wants anything specific done in their loan mod, that needs to be stated in the last four questions of the Quick Qualification form. Realize that the more specific that the homeowner gets (i.e. I want a 4% interest rate mortgage or lower) the better the odds that the file will get denied. The best client is somebody who wants their loan modified with a reasonable payment.

Remember, the average loan mod is 4-6% interest. Not a bad rate, right?

How Does the Homeowner Pay for the Loan Mod?

The homeowner can pay for the loan mod with a credit card, cashiers check, or money order. The homeowner can also use a friend’s or relative’s credit card.

Can a Homeowner do a Payment Plan?

No. All the money needs to be paid before the attorneys can start on the loan mod.

Who Does the Homeowner Pay?

The Homeowners pay the attorneys directly. The Rep does not, should not, and WILL NOT collect any money from the homeowner. The homeowner is paying a “retainer fee” to the attorney group.

Can the Rep Collect a Higher Fee for the Loan Mod?

No! The prices are set and will not be changed. This is due to the fact that the attorney’s are collecting the money and the prices will not change unless it is coordinated first through Accelerated Loan Mods.

What is the Default Rate of Homeowners Who have done a Loan Mod?

Although we have not tracked our numbers exactly for homeowners who have done a loan mod and then gone into (or back into) default, we can say that the national averages are this:

80% of homeowners who do a loan mod WITHOUT an attorney group go back into default after successful completion of a loan mod.

40% of homeowners who do a loan mod WITH an attorney group go back into default after successful completion of a loan mod.

 Why is this? The reason, we believe, is because attorney groups do a much better job with the loan mod than the homeowner does for him or herself. Attorney groups get better interest rate reductions, better terms, and thus a better solution for the homeowner.

Although we have not tracked our numbers, we believe that our numbers are probably better than national average.  We believe this because we only accept files that we believe we can get a workable solution on for the homeowners.  If we do not believe the homeowner will be able to make the payments that we are negotiating, then we will not do the modification.

Who are our attorneys?

Most of the attorneys have 6-12 years loss mitigation experience and are seasoned with doing loan modification and dealing with loss mitigators. We have a network of attorneys that have been doing loss mitigations for years.

All of the attorney firms are listed in the BBB and the client can check out the attorney’s firm (A, A-, or BB rating at a minimum) after the client’s file is accepted and before they pay for the full loan modification service and submit all the required information to the attorney. The attorney will prescreen the files in advance before charging the client any money and will refund the fee 100% if they can’t do the loan modification for the accepted file (based on the information provided in the Quick Qualification form). A real attorney actually reviews the file before accepting the case. You deal directly with the attorney’s law firm after your file is accepted.

We do not and will not give out all the names of the attorney groups before your file is accepted because we don't know which law firm will be directly working on your file until you submit the quick qualification application. I know you want them, but we don't do it because:

- The attorneys are busy doing loan mods. We're not going to let people call them and bog them down before they pre-qualify the client’s situation. Once a client’s quick qualification file is accepted by the attorney, THEN the client can check out the attorney firm who has accepted the loan modification case. It is not worth the attorney’s time to speak with someone who doesn’t have an approved loan modification file. Once the attorney gets the Quick Qualification form from the client, then they can accurately determine if they can be successful with the loan modification for the client; they do not have time to waste on tire kickers anyway (to be blunt about it) because they need to spend all their time doing loan modifications and taking care of their loan modification clients. When your file is accepted by the law firm, you’ll get a 14 page package that will include the attorney group that you, the homeowner, will be working with. You can then check out the attorney group before you pay and submit the final package to the law firm. Remember, the quick qualification is a free evaluation service.

What Are the Typical Results of Our Loan Mods?

NOTHING IS GUARANTEED! This is the first thing you need to understand. Our ultimate objective for a homeowner is to help them keep their home. We look at a homeowner’s debt to income ratio and work from there to get the homeowner terms of their mortgage that they can handle.

 That being said, we are typically seeing the following:

• Interest rates: 4%-6%
• ARMs changed to 30 year fixed rate mortgages
• Payments reduced

Again, these terms CANNOT and WILL NOT be guaranteed to a homeowner! We simply tell you this so you know what is happening in the industry today.  Obviously, payments are reduced due to the interest rate reductions.

Below is a list of recent loan modifications that have been completed for homeowners.  

Ready to start?  Email us at loanmods@lawfirmloanhelp.com and send us your contact information.  Have your information ready to fill in this Law Firm Home Loan Modification Quick Qualification Form.

Need more information?  Review the rest of the materials on this website, and submit your contact information for us to reach you.  We will promptly respond to your messages within 24 business hours.