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Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, LLP, recently released his list of the top ten steps homeowners can take in order to negotiate an affordable loan modification. The following steps apply to homeowners working directly with a lender as well as to those teaming up with an attorney or alternative third-party representative.
1. COME CLEAN
It can be tempting to bend the truth when you are trying to convince a lender to approve a loan modification. Only by laying all of your cards on the table and disclosing the truth can you begin to develop and implement solutions that will put you back on the path to long-term financial health.
2. UNDERSTAND YOUR LENDER’S POINT OF VIEW
As far as your lender is concerned, it all boils down to money. You are most likely to be approved if you can show modifying your loan will cost the lender less than a foreclosure.
3. KEEP A COOL HEAD
Expressing anger toward your lender puts you in an extremely disadvantageous position. For example, your lender may decide that you are unreasonable and that foreclosing would be less costly overall.
4. GIVE THEM WHAT THEY NEED
In order to expedite the situation, find out exactly which forms you need to fill out and which documents your lender needs to process your application. Make sure you provide everything to your lender or representative in the manner specified.
5. ASK FOR WHAT YOU WANT
Before meeting with your lender, make sure you spend some time figuring out what you want and need. For example, how much can you realistically afford to pay each month?
6. LET THEM DO THEIR JOB
Loan modifications typically take between 30-90 days from start to finish. During this time, avoid the temptation to micromanage the process. To alleviate unnecessary anxiety, ask your lender for an anticipated timeline.
7. GET YOUR FINANCIAL HOUSE IN ORDER
Put a tracking system in place today and start developing a budget to ensure you are not spending more money than you are earning.
8. KEEP EVERYONE POSTED OF ANY CHANGES
If anything changes related to your financial situation, be sure to keep your loan modification representative or lender in the loop.
9. MAKE SURE THE LENDER’S OFFER IS TRULY AFFORDABLE
If the loan modification is unaffordable or makes your budget so tight that you are only one car repair or medical bill away from defaulting again, head back to the negotiating table to try to work out a better deal.
10. HOLD UP YOUR END OF THE BARGAIN
The key to success is discipline and commitment. All the effort you spend setting up a plan is of no use if you don’t follow the plan you created or agreed to.
To read Ralph’s full article on this and other topics, please visit www.keepmyhouse.com.
Ralph R. Roberts, GRI, CRS is an award-winning author and REALTOR® who has penned several successful books, including his latest book, Loan Modification for Dummies (Wiley), slated for publication in summer 2009. For more information about Ralph please visit www.keepmyhouse.com.
The Federal Loan Modification Law Center, LLP, is a law firm dedicated to preserving the American dream of homeownership by successfully renegotiating loan agreements between homeowners and lenders. For more information please call 1-877-39-HOUSE (1-877-394-6873) or visit www.fedmod.com.
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