A Typical “Loan Modification” Timeline
The news had made the words “workout” and “loan modification” seem like simple solutions to difficult and very personal problems. We recommend to our clients that they try to remove the emotional issue (if possible and very difficult) and recognize that the Lender/Servicer employees are only doing the job as instructed by their bosses. These are employees handling 100’s of files just like yours and dealing with very emotional and angry customers on a daily basis. Whether you work with us or try to have your loan modified, remember anger and emotion only moves your file to the bottom. Keep a time and date record of every call made, every document sent, who you talked with and what the discussion was about when you talk with your Lender/Servicer and with us, Professional Loss Mitigation Services, LLC. The fact is that modifications or work outs take time, effort, skill, patience and guts to see the process through to the end. The following is only a guide, some loan modifications go quickly, and others take much longer. However, the better the submission package, the more complete the package and the more truthful the package, the greater chance of success.
Day 1 - Initial Consultation-Interview
Your initial conversation with the Modification Consultant will take approximately 30-45 minutes. You will discuss your particular circumstances; how you got into this mess. You need to be frank and honest with them. At the same time you should expect and receive respect and support during the conversation. Again, we understand that this is a highly emotional issue. They will email/fax or overnight to you the documents needed to properly assess your situation. Yes, it is almost like re-underwriting your loan all over again and you know how lengthy that process was. From this conversation they will start the assessment stage; entering your information in our secure data base and awaiting the return of the documents we sent you.
Day 3-5 - Due Diligence-Review
We sent you documents on day one and we expect them completed and back to us on the third day. Once the documents are back we start preparing a detailed file and reviewing your particular situation. This review includes debt ratios, loan to value, income and expenses; all based upon the information you have sent to us. At the same time we are researching the value of your home by contacting appraisers in your area, real estate brokers and online resources. What we are trying to develop is a true picture of what your home is worth as well as what you can afford to pay monthly to stay in your home.
Day 6-8 - Consultation
Depending on your schedule and if the documentation was complete and accurate, we should have a clear picture of where you are financially and what type of payment and terms you can afford. Based upon this information we will discuss with you the exact proposal we would make to the Lender/Servicer of your loan. While most people think that there is a lot of negotiating or back and forth with the Lender/Servicer, in reality, as a Loss Mitigation company that does work-outs/loan modifications, we already know what is acceptable. Plus, we are required to disclose our hand up front with true facts on the client’s income and expenses. It boils down to what they can afford, not what they want to pay. Once everyone agrees to the terms they want submitted to the Lender/Servicer the package is prepared.
Day 8 - 10 - Loan Modification Package Submitted
The completed loan modification package is submitted to the Lender for review and approval. If submitted by the client themselves, the approval process could take anywhere from 30-120- days depending upon the Lender and if they work only on those cases that are either coming up for foreclosure sale and/or going to the attorney for foreclosure first. In other words, the Lenders/Sevicers are so overloaded that their first priority is to those that are going into foreclosure or the sale is eminent; otherwise they take their time. If you use a Loss Mitigation service like ourselves, we have direct access to the decision makers and generally receive a decision within 72 hours.
Day 13 - 60/90 Days - Loan Modification Package Reviewed
As discussed, the modification review process is different with all Lenders. Do not expect a decision quickly. During their review process they may ask for additional documentation; that is not a good or bad sign, it just means they need additional documentation. Calling them every day or twice a day does not help either. They have a job to do and 100’s of borrower files to review. The only phone call or email you should make is to verify that someone received the package.
Day 15 - 60/90 Days - Decision Time-Offer
Not all decisions come back with a easy yes or no, some decisions are even subject to additional documentation. Whatever the decision is, the good news is that the process is drawing to a close.
Day 18 - 30/60 Days - Offer Acceptance - Offer Re-Negotiation
If they accept the offer and you can comply with the terms and conditions, the end is near. However, the Lender/Servicer may make a counteroffer that you will need to consider carefully. They may want a higher monthly payment than we think you can afford or other terms not previously discussed. The good news is that discussions are underway, the bad news is that someone needs to review and sign off on any counteroffers you make.
Day 25 - Day 180 - Agreement
The Lender will finalize and prepare the Modification Agreement. You will sign the documents, submit any money as required, and make the future payments as agreed.
Remember, the process can be as short as 30 days or as long as six months. The length of time depends on many variables, ie. the Lender/Servicer, if you hired a Professional Loss Mitigator, and how well prepared your package was for the Lender/Servicer. Only the courts can stop or delay a foreclosure action. No matter what the Lender/Servicer or Loss Mitigator says always have it put in writing before you sign anything. Never send a payment to anyone except your Lender/Servicer. Finally, it’s a stressful and emotional journey that can take it’s toll on you; keep your emotions under control and keep going at it. You can achieve your goals!
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