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How Do I Know if I Qualify for Mortgage Modification?

How Do I Know if I Qualify for Mortgage Modification?

How Do I Know if I Qualify for Mortgage Modification?

Surprisingly most people in Washington state don’t even realize that they can qualify for a mortgage modification or mediation. Mortgage payment each month is causing you more and more stress or you’re simply not able to make the payment, there are options. Washington state has Washington State Foreclosure Fairness Act, which was implemented several years ago helps Washington homeowners modify their existing mortgage in order to stay in their home.

Like to stay in your home there are options but there are also qualifications. Banks will not tell homeowners that there are options oftentimes considered a better “dirty little secret”. Banks have not financially incentivized homeowners to modify their loan in most cases, and this is where a mortgage lender needs to come into play. Homeowners cannot modify their own mortgage unless the letter asking for a straight refinance. Often, homeowners that are already struggling making their mortgage payment cannot qualify for refinance. This is where attorneys such as Advantage Legal Group can come into play. Attorneys or housing counselors must modify and mediate the mortgage refinance or modification on behalf of the homeowner. This really is the only caveat and can be difficult for a lot of homeowners to understand. Often get asked why they cannot simply go to their bank and ask for modification on their own. But with Washington State Foreclosure Fairness Act, there is a moderator on behalf of the homeowner that can handle and facilitate the moderation between the homeowner and the bank.

The downside is that the only way to qualify is to actually stop paying your mortgage. While this is often the case for a lot of homeowners, some may find it difficult to do so without food and utilities in order to make the mortgage payment. This is where the moderator needs to step in and provide alternate options. Once the homeowner is unable to pay and this is a payment, they can trigger events under the current law which provides the homeowner an option to elect to enter into mortgage mediation. The homeowner will receive the “Notice of Pre-Foreclosure Options” and after this will have 30 days to respond to elect to request a meeting with the bank in order to discuss the situation, however, this must be done with a moderator as in a housing counselor or attorney. You can meet with the bank on your own but homeowners cannot request mortgage mediation by themselves. This mediation can only be requested through a HUD counselor or mortgage mediation attorney.

(See How Advantage Can Help You)

If the homeowners do not want to enter into the mortgage ocean the bank will usually proceed to the second notice, “Notice of Default” 90 days after the issuance of the first notice. At this point that you can still request mortgage mediation but must be negotiated by the HUD counselor or an attorney. After notice of default is an issue they post the third notice, “Notice of Trustee Seller”. This is if the homeowner has not requested a modification. The bank will continue on the foreclosure without the homeowner does something to stop it.

  • In order to qualify the homeowner must complete the package for loan modification including submitting paycheck stubs, budget, documents that the loan servicer requests and a hardship letter stating why you are unable to make their mortgage payment.
  • The property must be the primary residence, meaning it cannot be an investment or rental property.
  • Homeowners to choose modification if they are unable to refinance. Allows a temporary briefing room to get through financial hardship.
  • Homeowners must also have adequate debt to income ratio. Lenders prefer as low as 36% but can go as high as 45%.

If you’re concerned you may not qualify contact Advantage Legal Group today to discuss your options! You might be surprised at how affordable a mortgage modification really is, even through an attorney. And of course, you’ll have the peace of mind knowing you can keep your home.

Contact them today!

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