Mortgage Rate Modification And Other Loan Modification Related Frequently Asked Questions

I Am Not Late On My Mortgage Payment, Will I Qualify For A Loan Modification?
Yes you may qualify for a loan modification from your mortgage lender. With the Obama Housing Recovery Plan announced March 4, 2009, lenders will get paid more by the Feds to modify high risk loans like ARM’s and Interest Only Mortgages that are not delinquent. The Obama Loan Modification Plan is designed to prevent foreclosures for all U.S. homeowners that have faced a financial hardship, are facing one now or into the future.

What Paperwork Will My Mortgage Company Need To Modify My Mortgage?
To prepare to get your loan modified you will need to gather your last month’s worth of paystubs, your tax returns for the last three years, your last 3 years of W-2’s, your last three months of bank statements and retirement account statements, social security award letters, pension plan award letters, annuity statements, your bills’ statements like credit cards – utilities – student loans – car loans etc., and a financial hardship letter explaining your situation. This might not be everything. When you ask your lender for a loan modification package, they will also tell you what they want to see when you return you package to them.

I Heard That With The New Obama Housing Plan That Lenders Have To Modify My Mortgage, Is This True?
No, lenders do not have to modify mortgages at this time. Lenders are encouraged to start doing more loan modifications with the financial incentive that the U.S. Federal Government is offering them to modify mortgages, but at this time lender participation is only voluntary. One thing to know is that if you are more than two months late on your mortgage payment your lender must look at your account to see about whether you could qualify for a loan modification program. If you are in this category it is advisable that you contact your mortgage lender immediately.

Is A Loan Modification The Same As Refinancing My Mortgage?
No, a loan modification is a rewrite of your current mortgage where you will end up with the same account number, pay the same lender and you do not pay closing costs or lock your rate etc like you would for a new mortgage. For a refinance, you get a whole new loan and your old mortgage lender is paid off. With refinancing your home you will pay closing costs whereas in a loan modification you may some sort of admin fee.

How Does My Mortgage Lender Lower My Mortgage Payment With A Loan Modification?
Mortgage companies can lower your mortgage payment with any one or combination of the following: lowering your interest rate, reducing the amount you owe on your mortgage, or extending the time you have to pay your mortgage.

What Mortgages Can I Get Modified?
You can only get mortgages on your home that you live in modified. This includes mortgages for a multi-family residence provided you live in one of the units. Second mortgages are not available at this time for loan modification programs. However, there are a lot of second mortgage companies working with homeowners on their second mortgage to find an affordable solution for both the homeowner and the second mortgage lender.

How Can I Find Out If My Lender Is Participating In Modifying Mortgages?
The best way to find out is to call your mortgage company. Their phone number is on your monthly mortgage statement that you get from them.