A loan modification in Georgia is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment. This might be a great way to avoid foreclosure or stop foreclosure if you’re already deep into the foreclosure process in Georgia already.
Loan Modifications In Atlanta Georgia
Loan modifications are confusing. Partially because of the abundance of legalese in the paperwork, it’s easy to agree to something you don’t realize you’re agreeing to. Don’t be had by a loan modification company in Georgia.
That’s what happened to Mallorie.
“My wife did a loan modification in Georgia on her home several years ago, before we knew each other. What was interesting is that the bank modified the terms of the loan, however, rather than forgive $55,000, which she was led to believe was happening, that $55,000 is tacked onto the end of the loan,” says Mallorie’s husband, Kris. “The bank made the mortgage payments affordable so that we could avoid foreclosure, but it was a surprise, when trying to refinance, that the equity that she thought she had was not there.”
If you’ve been through a loan modification, or know something about the loan modification process in Georgia, it isn’t surprising that rather than forgive it entirely, a bank would shift money owed to the back of a loan (the lender is going to come out on top). However, Kris says he received a flurry of documents in the mail. He doesn’t believe he was purposefully misled, but nobody spelled out how the loan modification would work, either.
“They knew what they were going to do before they did it,” says Mallorie, who modified her loan during the recession and when a loved one was sick; she was buried in medical bills and was behind on her mortgage, facing foreclosure.
“They never explained if I had any options,” says Mallorie, who justifies her reluctance to ask a lot of questions by adding: “When you’re behind on your mortgage payments and you’re facing foreclosure, you have a tendency to look at things a little differently and you’re eager to dive into your foreclosure options to avoid foreclosure completely.”
Loan Modifications: Lender Foreclosure Help
With a loan modification, the lender may agree to do one of more of the following to reduce your monthly payment:
- reduce the interest rate when you’re behind on mortgage
- convert from a variable interest rate to a fixed interest rate
- extend of the length of the term of the loan.
Loan Modification: Eligibility For Foreclosure Relief
Not just anyone can waltz into a their local bank and modify their loans on their houses when they hit financial hardship and become behind on their mortgage payments. To prove to the bank that you need loan modifications and that you really are responsible, you’ll need to provide the following information:
- show that you cannot make your current mortgage payment due to a financial hardship
- complete a trial period to demonstrate you can afford the new monthly amount, and
- provide all required documentation to the lender for evaluation.
Remember that it’s okay to be behind on payments. Banks understand that life happens, and that even financially responsible people hit hardships at times. They want to make sure that you are going to be able to pay the mortgage for the full duration and not have to go back and foreclose on the property next year. Just make sure that you have a solid plan to repay the portion of the mortgage that you have missed or the banks may still pursue foreclosure in Georgia.
There are many different loan modification programs available, including proprietary (in-house) loan modifications, as well as the Fannie Mae and Freddie Mac Flex Modification program.
If you are currently unable to afford your mortgage payment, and won’t be able to in the near future, a loan modification may be the ideal option to help you avoid foreclosure.
Loan Modification In Georgia: Required Documentation
Financial Statement
Provides a quick snapshot of the overall financial information for both the borrower and co-borrower. Must be fully completed with most current and accurate information.
Hardship Statement
This form allows you to explain in detail the reason(s) behind your current financial situation. In addition to filling out this form, you will need to provide proof of your hardship claim, such as medical bills, death certificate unemployment stubs.
Mortgage Statement & History
This will provide the most recent items received, this provides us with an accurate picture of the standing of your mortgage loan.
Proof Of Income
For W2 employees, two most recent payroll stubs for the month most recently
worked. For self employed borrowers a year to date Profit and Loss Statement.
Two Most Recent Tax Returns
Please provide copies of the originals, signed and dated. Please provide all schedules. For incorporated self employed borrowers we will require two most recent corporate returns as well.
Two Most Recent Bank Statement
Please provide all accounts and should contain all pages. Assets should include retirement accounts, CD’s, Stocks Etc.
Copies Of Monthly Statements
Please provide copies of any and all monthly expenditures. These should include utility bills (HOA, electric, gas), insurance bills (car, home, health), credit card statements, child care, home maintenance.
Be Aware: Loan Modifications
Your lender is going to come out on top. That’s almost inevitable. It might be helpful, when you’re thinking about a loan modification in Georgia, to pretend that you’re in Vegas. Think of your lender as a casino that wants your money. You want to win, but odds are, if you aren’t careful, you’re going to lose your shirt. Banks are in the business to make money and, as you read above, they won’t forgive the money that you owe them for the house facing foreclosure.
After all, a loan modification isn’t a refinance. You refinance when you want a better interest rate, and you have the good credit to get it.
As a general rule, you tend to modify a loan when your credit is bad enough that you can’t refinance the loan – so your lender changes the terms of how you’re borrowing for this current loan, so you can get back on your feet and continue paying off the loan. This almost always means that while your payments may become lower, the length of your loan stretches out much further. Just know that you’re going to build equity much slower. However, that’s a small price to pay versus foreclosing on your house and ruining your credit for 7 years.
Getting Help: Foreclosure Options
If you find that you are having difficulty understanding what you need to do to complete your application or are having problems dealing with your servicer, rather than hiring a loan modification company, consider talking to an investor like Breyer Home Buyers.
If you want to save your home from foreclosure, and you want to skip getting your loan modification in Atlanta, then give us a call or fill out the form below now. We help people all over Georgia by buying their houses during the foreclosure process in Georgia
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