Last Friday I had a visit from one of my most reputable bank attorneys.  His business of closing loans is very quiet, but he told me about a new business he has started.  He negotiates modifications of mortgage for people that cannot refinance their existing loan, but want to keep paying it.

 

The criteria is that you need to be able to continue to make the payments to the bank.  The lender will ask for all sorts of information and documentation concerning your ability to make your mortgage payments.  Basically, the bank is refinancing your existing mortgage at a lower rate so you can keep up. 

If your interest rate is too high or has adjusted to a much higher rate, you might want to approach your lender and ask them to lower your interest rate through modification.  Even if your loan amount is higher than the current value of your home, they might do it!  Cool. Ask what the criteria is to qualify and what the process is

 

Be prepared to provide proof of income, bank statements, credit report, appraisal, and title search. I assure you, you will have to make a zillion phone calls to find the right person, fill out lots paperwork and pay some fees. Sound overwhelming? It is, but what are you willing to do to save some money?  Think you need an expert?  Try it yourself first. Really it might not be so bad.

 

I am writing this blog entry because I have read about several companies that have begun to advertise this service.  I imagine that most of them are not reputable.  I bet some are ex-mortgage brokers.  If you cannot do it yourself, call the lawyer that did your closing for you.  Maybe they can do it. I would rather pay a lawyer than use a fly by night shop that is trying to fill in income.  What should you pay for this?  Not sure.  My guy is charging $5,000 for the service.  I guess you will have to see what the savings will be and do the math.  It is kind of like figuring out if it is worth refinancing your loan just to lower the interest rate.

 Dale Siegel