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Feldman Law Center – Ten Tips for a Successful Home Loan Modification (Page 1 of 2)
Feldman Law Center – News by Feldman Law Center – A home loan modification, for many homeowners, is the only option standing between them being able to stay in their homes and being forced to move after a foreclosure, a short sale, or a “cash for keys” negotiation. If events are unfolding rapidly, the modification is one shot deal that must be done correctly and as quickly as possible. The following tips will give you the best chance at getting your home loan modification completed with terms that you can sustain for the long term. They are:
1) Be realistic – If youre behind on your payments without relief in sight, magical thinking isnt going to get it done. Its time to figure out who is going represent you in your modification.
2) Hire a professional Getting a loan modification executed, with terms that address your specific needs is not childs play. This is the roof over your familys collective head. Hire an experienced attorney to make sure the modification happens and that the terms are within your budget and sustainable for the long term.
3) Pull your paperwork together – Youre going to turn in about as much documentation as you did for the original loan. Have it copied and ready to go. Keep an extra copy just in case the lender needs a re-submittal.
4) Bring statements for all your credit card and consumer debt to your initial consultation Your attorney is going to need to know the total of your monthly expenses to be able to negotiate the right loan modification for you. Additionally, there may be an opportunity to set up a debt negotiation to run concurrently with your loan modification. The debt negotiation can save you more money and increase the odds of getting your modification approved.
5) Be honest with your attorney – Whether you were stating assets and income or something else, come clean with your representation. If you got creative with your tax returns during the application process, the new 4506-T form could work against you by permitting your lender to verify that the tax returns used to apply the first time are the same as the ones you turned in to the IRS. Let your attorney know about the situation so that he can prepare for it.
6) Be honest with your lender Trying to put one over on your lender isnt likely to work. Remember, they still have all of your original documentation, so forgetting about bank accounts or enhancing your “resume” will be caught and definitely frowned upon.
7) Write a compelling hardship letter – This will be the basis of your loan modification. Its basically a chronology of how events unfolded to put you in need of a loan modification and how youre going work your way out of it. 8) Be patient Loan processors have more than they know what to do with at present. Working with a law firm will expedite the process but the workload on the lenders side is so heavy that process will take time.
9) Respond to requests for additional information quickly You may be asked for updated versions of statements and paystubs as the modification process moves forward. Responding quickly will keep your file moving and on the top of a processors stack of applications.
Introduction to Credit Cards
You probably already know what a credit card is. You see the ads every day – in the television, on the radio, in the newspapers or on billboard advertisements. Your friends, parents and relatives use them all the time. But just to clear up any misinformation, lets look at what credit cards are, why you should have one and what risks are involved with using one.
Simply stated, a credit card is a financial arrangement between you the card holder and a financial institution such as a bank or credit union. The arrangement specifies that you can borrow money from the lender as long as you promise to pay them back in the future. The lender sets the terms for the deal, including how often payments are due, what the minimum payment will be and what interest rates will apply. Your payment will include not just the amount of money you borrowed, but also an additional charge based on that rate of interest.
Credit cards can be used as a tool, offering many benefits for consumers. Some of these benefits include:
Convenience: With a credit card, you can buy anything you want right away, whether or not you have the cash available at the time. If youre purchasing a big ticket item like a computer or a washing machine, you dont have to wait for months until you save up the money.
Emergency Protection: If youre ever in an emergency, youll see how helpful a credit card can be. Whether youre stuck with medical bills or auto repair fees, using a credit card can help you get back on your feet again.
Security: Large amounts of cash can be lost or stolen. But if your credit card goes missing, you can have the account cancelled and a new card issued without losing any of your money.
Building Your Credit: If you dream of buying a house or really nice car, you need to have a credit history that demonstrates you can take on debt and pay it back on schedule. You can use a credit card to make small purchases and build up your credit score by paying your statement on time.
When used responsibly, credit cards can help improve our daily lives. But the temptation to live beyond your means and max out your credit limit can be a problem. Thats why its important to think of your credit cards as tools that you can use, not free tickets for anything you want. Here are some simple tips to help you cope with your credit card debt:
Make a Budget: One of the first steps to financial freedom is a realistic budget. If you dont already have one, check out the article Creating a Budget on Smart Young Money and set one up for yourself. Sticking to a budget will help keep you from splurging with your credit card.
Set a Limit: Many analysts recommend keeping your credit card balance around 30% of your credit limit for maximum benefit in the formula used to calculate your credit score. Promise yourself not to exceed that limit and you wont have with out-of-control credit card debt.
Go Back to Cash: If youre having trouble keeping your credit card in your pocket, switch back to cash for awhile. When you use a credit card, you dont get the same feeling of having forked over your hard-earned cash, so youre prone to spending more. Using cash for a bit will help you remember that little purchases add up.
Get Credit Counseling: If your debt gets out of control, talk to someone! Ignoring your credit problems wont make them go away it will only make them worse. Talk to your parents or a trusted friend who may be able to help, or consider getting help from a group or institutions that can help you with your problems.
Credit cards can be helpful tools, but the potential for abuse always exists. Taking the time to learn how to use credit cards properly can help you prepare for a bright financial future.