It is estimated that 40 percent of loan modifications fail and the borrowers default the first time around. It is no surprise, as many are locked into a price that they can afford. However, due to the fact the Making Home Affordable HAMP Program obligates the borrowers to include escrows (taxes, insurance and PMI) in their loan modification payment, as soon as taxes or insurance rise, so does the payment. This results in the borrower once again defaulting.
A recent report prepared by Barclays revealed that “75 percent of remods occur after 18 months of the previous modification, and about a quarter of those remods were given to borrowers who were current”. Source: DS News February 18, 2013.
Moreover, as more bank have faced an avalanche of lawsuits, investigations, audits by the Department of Justice as well as penalties, when older loan modifications did not see principal reductions, nowadays the lenders are much more agreeable to reducing principal and interest rates. “Our largest principal reduction to date was $302,000.00 off a primary loan” Says Jacqueline A. Salcines, Esq., an attorney handling loan modification in Coral Gables, Florida.
“The best advice I can give to anyone out there looking to modify their existing loan is do your homework. Make sure your lender participates in HAMP. Make sure your numbers are right. Many borrowers submit RMA Loan Modification Packages thinking they have to show a deficit every month. That is, more expenses than income. This criteria will actually get you denied, FAST. You must follow the ratios of the bank to make sure your numbers qualify you. And if they dont, there are avenues to pursue to get them there. Lenders allows contributions to income from food stamps, family members, rental of rooms inside the home, cash tips, etc. But if the borrower does not know this, provides their financials over the phone and gets disqualified, there are no second chances.” Jacqueline A. Salcines, Esq.
If you are having trouble making your mortgage payments, consult a Loan Modification professional that is familiar with the rules and regulations specific to each lender. Make sure your numbers are run before you are charged. “At my firm, my practice is to qualify the borrower first and foremost during the initial consult. Unless you qualify, I will not take your case”. Jacqueline A. Salcines, Esq., Jacqueline A. Salcines, PA
Call us anytime for a no fee consultation to see if you qualify. Even if you have modified in the past, you may still be eligible for a principal reduction and lower interest rates under the new regulations.
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Jacqueline A. Salcines, PA
Telephone: 305 | 669 | 5280