As a homeowner, you need to be aware of the loan modification laws in your state to determine how difficult it will be to actually be approved for a loan modification from your lender. The Home Affordable Modification Program has entitled homeowners around the country to loan modification as long as they are under financial hardship, but state laws and lender-specific guidelines keep homeowners like you from getting loan modification in time.
The state loan modification laws usually dictate who can and can not handle loan modifications, like mortgage brokers or attorneys. These laws are difficult to find, but in many cases with make or break your attempt at receiving a successful loan modification. If you are curious about your state’s loan modification laws, try to get in contact with your state’s Real Estate Commission. The information may be difficult to find, but going right to the source to see if you are save to try for loan modification in the method you want to can save you time, money, and your home.
Lender-specific loan modification laws aren’t so much laws as they are distinct guidelines that each lender instates to ensure that only the people strictly within their loan modification requirements get approved. These "laws" usually revolve around the following factors:
How much your mortgage is for.
How good or bad your credit is.
Whether or not you have been late on a mortgage payment.
How much below the property’s buy value the property currently at (percentage-wise).
Whether or not you have been through a bankruptcy.
Your exact financial hardship situation
Each lender is very strict on their guidelines/laws, and before doing anything else it is in any homeowner’s best interest to research and find out what their lender’s exact approval criteria are. Again, a lack of knowledge can end in a big waste of time and money on your part.
There are laws dictating who can do loan modification because of the amount of loan modification scams and frauds there are in the current market. Homeowners desperate for assistance with no foreseeable way to get it often turn to agencies who claim to guarantee that they will be able to reach a successful loan modification with anyone’s lender. Often these scams require an up-front payment from anywhere in the hundreds or thousands range, which is not used for negotiating with the lender, but rather goes straight into these fraud’s pockets.
Before making any sort of move on your loan modification, check up with any loan modification laws that are pertaining to you — laws under the Home Affordable Modification Program, in your state, and with your lender — then move forward from there. There are free consultations provided under the Home Affordable Modification Program that can set you on the right path and negotiate with your lender.
For additional information on loan modifications, visit Home Loan Modifications.
