Formula For Mortgage Modification Success

While not everyone facing a foreclosure or mortgage debt crisis will be able to successfully secure a loan modification, there have been plenty who have. In fact, a new report shows that there may be a particular formula for boosting a homeowners chances at successful mortgage modification negotiations.

Plan Of Action

Perhaps one of the most overlooked aspects of the mortgage debt negotiation process is making early contact. Lenders are more willing to negotiate and work with homeowners who contact them before a payment is missed. Why? Because lenders view missed payments as either (a) irresponsibility on the part of the homeowner or (b) the inability to financially maintain a payment plan. While the latter may be true, getting in contact early about the possibility of a missed payment due to financial constraints  gives the lender time to work out a solution.

Research also shows that homeowners who attend foreclosure or mortgage debt counseling sessions may be more successful in negotiating debts. Some lenders offer such sessions or provide borrowers with the resources needed to find an agency to assist in reviewing their options. Lenders look favorably on homeowners who have done their research and show initiative in taking responsibility for their debts.

A recent report from The U.S. regulator for national banks, the Office of the Comptroller of the Currency (OCC), says they may found a key to some success for certain types of mortgage relief standards. According to the OCC’s Mortgage Metrics Report for the third quarter of 2011, homeowners that obtained loan modifications that reduced payments by at  least 10 percent have shown more long term success. The OCC also reports that, despite much criticism, the Home Affordable Modification Program (HAMP) has outperformed non-government sponsored modifications.