One of the best options for Georgia homeowners who are falling behind in their mortgage payments is to request a loan modification from their lender. As soon as you determine that you cannot continue making your current mortgage payments because of a financial hardship, you should contact your lender to discuss a modification. You may want to hire a Georgia loan modification attorney to help you negotiate a good modification for your financial situation.
Mistakes to Avoid
Avoiding the following mistakes give you a higher percentage rate that your lender will create a modification that works for you:
- Not understanding the process. Do your homework first so you are knowledgeable about the process. This way you know what questions to ask your lender.
- Don’t be intimidated by your lender. They cannot just throw you out of your home without going through a formal foreclosure process first. Most lenders would rather work with you to help you keep your home by giving you a modification.
- Negotiating a modification on your own. You will have much better success having an experienced attorney represent you. The attorney has established relationships with lenders and is an expert at mortgage and foreclosure laws.
- Noting meeting the guidelines. Calculate what you can afford first. Most lenders are looking to see that your monthly payment is at or below 31% of your gross monthly income.
- Frequently borrowers forget to attach all the required paperwork including a hardship letter, financial documents and an authorization letter for their attorney or other third party representative to negotiate with their lender. This slows down the process, and could even jeopardize your attempt at obtaining the modification. Be sure you call and ask the lender what they require, and follow their instructions exactly. If you are not a detailed oriented person, more reason to get help from a modification attorney.
- Don’t be afraid to counter back a proposal to your lender if you are unhappy with the terms. Keep negotiating until you get what you want.
Favorable Terms
You want the lender to give you favorable loan terms by reducing your interest rate at least 2% and reducing your principal as well if you are upside down on your mortgage so you will have some equity in your property. The other items you should negotiate are for your lender to waive any fees and interest on the default amount. Extending the loan term will also help to lower your monthly payment to one that is more affordable. Some lenders will eliminate the arrearages if you ask or at the very least put them at the back end of your loan. The goal is to permanently modify your loan, especially if you are upside down on your mortgage, so that you can afford to make the new payments, and keep your home.
In turn, lenders want to make sure you have enough income to afford your new payment, and they want to see documentation in support of this fact. Be sure to send them the following information:
- 1099’s or W-2’s
- Last two paycheck stubs
- Last two year’s income tax returns
- Bank statements
- Financial statement
- Financial Hardship letter
- Authorization allowing your attorney or other representative to negotiate on your behalf
Consult with an Attorney
Lenders can be difficult to deal with regarding obtaining mortgage loan modifications. An experienced Georgia modification attorney knows who to speak to and how to negotiate the best modification for you. It is well worth spending a little extra money to hire an attorney so you get the results you need and want.
