Real Estate Loan Modifications: What Are The Banks Looking For...

Out of the 3 years I have been dealing with loan modifications I have seen the banks streamline the loan modification process to get you "Pre-qualified" for a loan modification.  Most major banks from "Bank of America" to "Chase" are taking the same approach and now do the monthly expense report over the phone with the homeowner.  If the homeowner's payment is over 31% of the homeowners Gross Monthly Payment the bank will grant a loan modification pre-approval at the time of the call most of the time. Most times you will get a trial period modification payment for 3 to 4 months.  So let's say your original home payment was $3,100.00 that' includes Principal, Interest, Taxes and Insurance.  Now your Gross Monthly is $5,000.00.  Your home payment is taking 62% of your Gross Monthly income per month.  So your new mortgage payment should be $1,550.00 per month! On paper you qualify for a home loan modification per the guidelines of the Obama Plan or "Making Home Affordable Program" Use the link below to see what your new modified home loan payment can be. 

http://makinghomeaffordable.gov/payment_reduction_estimator.html

You want to make sure you go over your numbers before you call the bank and do the expense report since if you do not qualfiy and do not fall under the bank guidelines you will have to wait up to 30 days to call back to resubmit your expenses to the bank.  Also please remember that your revolving debt "Credit cards, car payments" will be looked at too.  So if you are too much in debt you will more then likely will need to settle your revolving debt in order to qualify for a loan modification from your lender.

Other options banks are granting more and more are  a "short sale" or "cash for keys" options to have the borrower avoid the foreclosure process.

Feel free to contact me with any questions you may have regarding anything dealing with Real Estate I'm here to help!

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Real Estate Loan Modifications: What are the banks looking for to approve you for one.

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