Loan Modification Attorney Facts

For HAMP, your loan must be under $729,750. But to refinance the loan, it must be serviced by either Fannie Mae or Freddie Mac. If you are looking for a loan modification, you may still be entitled to get one through your lender, but must still qualify in other ways.

If you can't get a loan modification under HAMP, you can try to talk to your lender about doing a custom loan modification, but I have no idea if they'll be willing or able to do anything. You're essentially asking them to cut off a huge hunk of principal and they might just say no. In that case, your best option would be to simply hand over the house to the lender, or do a deed-in-lieu of foreclosure if you can no longer afford the payments.

You're right - until you miss a payment your lender will likely be unwilling to do anything. So you'll be stuck with a destroyed credit history and credit score no matter what.

While it shouldn’t be that way, and lenders should be willing to modify loans that are not delinquent but might become delinquent in the future, lenders are busy working on loans that are delinquent and may not see a need to work with a borrower that is current on his or her loan.

When it comes to HAMP modifications, the success rate has been rather dismal. From what I have heard, only about 5 percent of all temporary loan applications have gone on to become permanent and only about 10 percent of all applications have been approved as trial loan modifications. With those numbers, it may not make sense to pay someone to help you with the loan modification.

The paperwork involved for a loan modification is similar to the paperwork you would deliver to a lender if you were refinancing your loan. You would, however, also need to present a hardship letter outlining why you believe the lender should give you the loan modification based on your circumstances.

Most trial loan modifications reduce the amount of interest that the borrower is paying, thus lowering the interest rate. Generally, principal reductions are not being done, but lenders will do forbearance agreements, where you simply don’t make payments for a period of time.