Understanding the Lender’s Perspective

Loan modification may seem like a simple process, but in reality can involve many complications. Many of these can be resolved by understanding the requirements and viewpoint of your lender, the key to a successful modification.

Keep the following points in mind when preparing to submit a proposal.

    • Your lender would rather accept a loan modification than lose money through a short sale or foreclosure. He or she will support efforts to keep your monthly payments timely, and will most likely work with you to avoid a foreclosure situation and the loss of payments altogether.
    • Each lender has different requirements and standards for modification. What your friend’s lender accepted may be different than what your own lender accepts. Make sure you know what is expected of you before submitting a proposal.
    • The lender wants to know that you have made the bank a priority. If you are not serious about catching up with your payments, the lender will not make an effort to revise your payment plan.
    • The lender also wants to know that you had a good reason to stop making payments, and that the reason is now resolved. A loan modification is not going to be granted just because your home is now worth less than it was years ago. You should take care to hire an attorney who can craft a well-written and respectable hardship letter outlining your situation and what has changed that will allow you to resume making payments with a revised plan. If you will not be able to afford even reduced payments, it will not be worth the lender’s time to modify your loan.
    • In many cases, the lender will respond more favorably to an attorney representing a borrower than to someone who is attempting to negotiate their own loan modification. Too many borrowers dive into the process without knowing all of the rules or without being able to back up their claims with sufficient documentation. It is always a good idea to have an attorney negotiate your modification to secure the best deal for both you and your lender.
  • Lenders are busy, too. They receive thousands of requests for loan modifications and it will take time to sort through all of them and decide on suitable candidates. You can make their decision easier by being informed and prepared and submitting the best package and proposal possible with our help.

Call SKB today to schedule your free consultation.