Saturday, March 26, 2011

Key Considerations in a Loan Modification

People ask me all of the time to identify the key component of a successful loan modification. I advise them that BY FAR, the most important aspect of a loan modification is being persistent. Keep, keep, keep trying. I have never heard a lender say that they cannot modify and you cannot try and longer. They will consider your application, over and over again.

I have had many clients that were rejected numerous times only to receive modification later. There are many reasons why this works. The main reason that persistence pays off for you is that modifications run in cycles. Sometimes they are readily available and other times they are not. So if you keep trying, eventually your lender will be amenable to modification. Another reason that it is costing them money to process the applications and eventually they may give you something for your persistence. Persistence indicates that you are more than likely to stay in a home.

One of the reasons that many applications are being rejected is that two-thirds of modifications end up back in default so the theory is why should we modify?? If you are persistent, it shows the lender that you are sincere in your desire to stay and that you will be able to make payments if they modify.

The "positioning" of your application is critical. It is important to know the state of the industry when submitting a modification. With the help of a skilled attorney and some persistence, you can get a good modification result....but it will take some time!!

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