I can count how many people have asked me about how to remodify existing crappy mortgages and negotiate with the banks for loans with better rates, but then I only have two hands to count on. Here's what I tell them.The steps to loan re-modification:
1. Contact a non-profit HUD approved Housing Counseling agency by phone. These services are free, regardless of income. There should never be a charge for Govt. approved housing counseling. And there should never be a charge for loan remodification negotiations. You can do this process yourself without a 3rd party agency by following these steps. For a complete list of non-profits specializing in housing counseling visit the following link
2. Explain your mortgage situation over the phone to the scheduler at the counseling service. The agency will mail you paperwork that you must complete and mail back in order to make an appointment.
3. Once the paperwork is received, the agency will review the completed documents and contact you by telephone to schedule your appointment (generally one week later)
4. On the day of the appointment, bring all bank statements, mortgage papers, etc., and whatever else you are instructed to bring. (keep in mind that appointments are running about 30 days out.)
5. On the day of the appointment the Housing Counselor will look over your financials, explain your options for obtaining a better loan, and attempt to contact and speak with someone at your mortgage company. They will also ask the mortgage company which programs are available for refinancing and remodification, and will explain these to you.
6. Usually, the mortgage company will have you submit via fax some bank statements, paycheck stubs and a hardship letter, which basically explains what life experiences you are facing that will prevent you from continuing to make payments on your current mortgage.
7. Contact the mortgage company to make sure that they received the necessary paperwork to begin reviewing your application for a loan remodification.
8. When dealing with the mortgage company it is important to document everything that you are told in writing (email/letter) and over the phone. Include the time and date of the call, the name of the person you spoke with, what they said, and the issue that you called about. Keep this list somewhere handy by the telephone, along with your loan documents.
9. Keep in mind that it takes about 60 days for the mortgage company to review your paperwork and look over your re-modification application. They may try contacting you to question you about your financials, so be sure to give them every available contact number so that they can get in touch with you.
10. Beware of letters or phone calls by other companies offering remodification. These letters may appear to be from your mortgage company, but in fact are from other organizations seeking to remodify your existing mortgage for huge fees. These letters can be hard to discern. When reviewing any communication, it is important to call your mortgage company at the number given on your bill, or that you normally use, before responding to any communication or giving personal information on the phone. Remember, the mortgage company already has your personal information, but the amount that you borrowed on your original loan is public information and sometimes used to fool you into giving out personal information.
11. If for some reason, your mortgage company does not return your calls/letters/emails you may contact the following agencies and file complaints: Nevada Mortgage Lending Division, Attorney General’s Bureau of Consumer Protection, Nevada Financial Institutions Division, Office of the Comptroller of Currency, United States Department of Treasury, and the Federal Trade Commission. It is always a good idea to mention RESPA (Real Estate Protection Act) in any contact that you have with the mortgage company. RESPA states that the mortgage company basically has several weeks to return your calls and resolve a particular issue. Be sure to include your log of attempts at contact with the mortgage company if they are giving you a hard time.
12. After about 90 days, your loan remodification will either be accepted or denied. If your remodification is accepted you will receive a packet (by FedEx or UPS). The packet will contain paperwork regarding the terms of your new loan. Read the paperwork carefully. If the remodification terms are acceptable, sign the paperwork and return the envelope with instructions given.
13. Continue to follow up with the mortgage company until you make your first payment under the terms of the new loan remodification. Follow up with every communication you receive from your mortgage company, including letters stating that your account may be overdue. Continue to document any communication regarding your mortgage to use in any future communications.
14. Attend local attorney Robert Massi's free lecture on Tuesday the 24th of February at 6 p.m. at the Paseo Verde Library where he will be speaking about this very topic. 280 S. Green Valley Parkway, Henderson. Call 870-2626 to register for this program.
