A loan modification is a process of modifying the original terms of a mortgage contract in order to assist a borrower through a financial hardship. In most cases a Washington Mutual loan modification will allow a borrower to lower their monthly payments by adjusting the amount of interest that a lender collects. Since any amount of interest will still allow the lender to make a profit, lowering the amount due is hardly ever a problem. The lenders may huff and puff over the request, but the truth is that they aren’t losing money, they just don’t like to loosen their purse strings if they don’t have to.
In order to successfully request a Washington Mutual loan modification a person must generally be able to prove some sort of hardship to justify a modification. Different lenders have different rules as to what constitutes a hardship, but any event in a person’s life that could cause a loan to potentially fall into default would be considered a hardship. Common examples of hardships include: job loss, loss of the sole bread winner for a family, a sickness or disability that prevent a person from fully performing their job, a major natural disaster, legal troubles, etc. Many lenders will prefer to work with the borrower to modify a loan rather than let the loan fall into default because, in the eyes of the lender, any monthly payment is better than no monthly payment.
The important thing for the borrower to remember about requesting a Washington Mutual loan modification is that they are essentially entering into a negotiation with the lender to lower monthly payments. The amount that a monthly payment is lowered by will often be in direct relation to the amount of effort a borrower puts into the negotiation. This is where an experienced attorney will come in handy. Attorneys are great negotiators because they have the knowledge to counter claims made by the lender and they know that lenders can almost always go lower than they say that they can. Most private citizens who try to save themselves money on the cost of an attorney may only hurt themselves in the long run by agreeing to a monthly payment much higher than they could have gotten because the representatives for the lender know that most people don’t understand the inner workings of the financial industry enough to successfully negotiate a loan modification. Many private citizens who attempt to negotiate their own loan modification make the mistake of believing the representative that they are dealing with is there to help them. If this were the case, the representative wouldn’t be on the lender’s payroll.
In order to lower a monthly payment by as much as possible, consult with a local attorney with experience in dealing with lenders and borrowers. The out of pocket expenses might be greater today but will almost always benefit the borrower over the life of the loan. Many financial attorneys understand that their clients are coming to them because they are in debt or at risk of falling in debt and will allow some or all of their services to be paid over time. If negotiated properly, a loan modification could potentially cover the cost of attorney services while still lowering a borrower’s monthly payments.