This is a question a lot of California Homeowners are asking. If you’ve fallen behind on payments but you don’t want to lose the property maybe there was some hardship in your life or something came up which caused you to fall 60, 90, 120 or 180 days behind on payment or you are even in a foreclosure, the lenders file a notice of default or you are somewhere in that process. You may be able to get a loan modification and get yourself out of that situation by working out a repayment plan with a lender. You probably knew all that. The question is can you get a loan modification? How can you get a loan modification? There is a lot that goes into it, a lot of documents and information the lender is going to want but in a nutshell, to oversimplify this process down to one thing.
What they are going to be looking at is income. The lender is going to want to see that you earn enough money to make your mortgage payments. So they are going to take your gross income and your net income after taxes are paid and then subtract out the necessary living expenses, the utilities and gas and insurance and all that and then the question that they are going to ask is “Is what’s left over enough for you to make a reasonable mortgage payment based on your mortgage balance. If you can, there is good chance that you can qualify for a loan modification. If your income is very low or has been substantially reduced and you don’t have that income in your budge to make a mortgage payment, they probably will not offer a very good loan modification option if they offer anything at all.
It’s essentially the lender trying to re-qualify you for the mortgage that you are already in. It’s not quite as difficult when qualifying the first time but they do require a lot of paperwork and a lot of documents and they really just want to see the income. What they don’t want to happen is to give you a loan modification and then have you default and not make the payments again and be right back in the same situation. They’d rather just foreclose on the property and take the hit now than drag it out for another year or 6 months or something like that. So that’s typically what goes into the lender’s decision as to whether or whether not offer you a loan modification and whether you can get a loan modification.
If you have questions or I can address some nuance of this process, some specific area of this process, I’d be happy to do so. Just subscribe to my channel, put a question in the comments section and I’ll try to make a video for you. Thanks for listening.
For more information on Getting A Loan Modification, a free initial consultation is your next best step.