Loan modification and Foreclosure site

There has been a lot of chatter recently in the financial field by people wondering what the “average loan modification” consisted of.

The average loan modification includes:

• Between 40-60 phone calls related to your loan alone!
• Roughly 60 e-mails related to your situation to your lender and whatever advisor you are working with.
• A 90-120 day waiting period from the start to the finish of your modification.

I’m not trying to scare anyone interested in a modification, I just don’t want anyone to think that this is an easy process by any means. People look at a loan modification and see “I can keep my home and lower my mortgage payments at the same time!” This may be true depending on your situation, but it does not come without a cost.

*The following loan modification example is completely made up for learning purposes only

Bob and Linda live in a nice, upper middle class neighborhood with two young kids. They were doing okay financially, but the recent economic downturn has hit them pretty hard.

Bob went from making low 6 figures a year to making $40,000 a year as a freelance engineer due to the huge downturn in the real estate market. Linda, a former stay at home mom, now has a part time job, but money is still very tight.

They have two real options: Make a successful loan modification, or lose their home. They choose to be smart about their situation. They get in touch with their bank and tell them the situation and they talk to an attorney.

After a couple of weeks of negotiating, the bank decides to allow Bob and Linda to pay less to their mortgage for the forseeable future until they get back on their feet. Bob and Linda get to keep their house and the bank does not have to foreclose their home. Everyone wins.

This is just a made up example, but it does show you how well a loan modification can work out if it is done right.