One option for resolving mortgage debt and lowering payments to stave off the threat of foreclosure is a mortgage modification. However, not everyone is successful in securing a modification with their lender. However, part of the problem preventing people from successfully obtaining a modification agreement can be alleviated with a little preparation.
Not Applying Early
Although some people advise missing one or more payments on mortgage before applying for help with the lender, this strategy can often be self-defeating. Lenders may initiate the foreclosure process right away or, in most cases, lenders are unwilling to negotiate a solution after payments are missed. Once viewed as a borrowing risk, lenders may not offer loan modifications to borrowers. Your best chance at securing a modification is to apply before missing a payment.
Some lenders hold strict qualification standards for mortgage modification applicants. In some cases, the credit score required to obtain a modification may be out of reach. However, you still have options. You can continue to negotiate a modification, but change the type of modification you are apply for. For example, instead of asking for a reduction in interest rate you can request a temporary suspension in your current rate or payment. Also, the government backed HAMP program may be able to help you qualify for a loan modification if your lender isn’t participating.
Many people that pursue mortgage debt solutions may apply for help, but fail to follow up with their lender. It is important to remember that your lender is dealing with thousands of homeowners, some of which are also in the process of negotiating a deal. You must stay in constant communication with your lender and be an active participant in the process if you want to secure a modification deal successfully.