Financing in Lone Tree>Question Details

David Elson,  in 80104

Are loan modifications any real help? Who qualifies? Does it effect credit? Is an attorney helpful/required?

Asked by David Elson, 80104 Fri Aug 14, 2009

I'm a RE Broker investigating options for a distressed homeowner.
I'd gladly do a short sale for them, but don't want to hurt their credit if I can avoid it.
They are not behind on payments so, how about a loan modification?
I'd think they would qualify..... she went on short/long term disability and his income dropped by 80% recently.
Do they need to just talk with a lawyer or are there credible loan mod companies out there?
Or does this even work? I heard last year of several cases where the banks just would not cooperate forcing a short sale situation. The value of the home is less than the 2 mtgs against it. BTW... The 1st lien holder is Chase and the amount is $490,000 (not a Fred/Fan M loan). 2nd is a line of credit w/Country Wide.


Thanks!

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3
It might be best to turn this over to a broker that has expertise. I referred a similar deal out recently. I'd rather have a 25% referral fee than a potential problem from future lawsuits or the real estate commission when the rules change...
0 votes Thank Flag Link Thu Dec 2, 2010
My mortgage is with a local bank. I walked in the door, spoke to the loan guy, and we did a loan modification. NOT a refinance. It did NOT affect my amoritization schedule. I paid a 1% fee and no closing costs.(personally, I would never refinance. When the amoritization schedule gets reset back to 30 years you pay MUCH more interest. Sure, the rate is lower, but do the math.....you actually pay more interest)
0 votes Thank Flag Link Wed Oct 27, 2010
David,
It sounds like they have a legitimate hardship. My experience with all of the modifications and programs is that they are going to hurt their credit. Since it is not with Freddie/Fannie some programs will not work for them. The safest way to do it is for them to apply directly with their bank with the assistance of the government counselors at http://makinghomeaffordable.gov/ It is a long road to travel and none of the options are pleasant. The banks may not cooperate, but they will not know until they try. If they have large assets that they are unwilling to tap for various reasons be careful what they give the bank. Any information that they provide to the bank can and will be used against them in the future to collect on a deficiency. Depending on how far upside down they are and the assets that they have, a strategic default may be in their best interest rather than a short sale. Definitely recommend legal counsel in every situation. Oliver Frescona has experience in these deals.
0 votes Thank Flag Link Fri Apr 23, 2010
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