2009 may go down in history as the year of the loan modification — that’s all anyone is talking about these days. And every week I speak to local homeowners who are frustrated with the process of obtaining a loan modification. I know there are a lot of people out there that claim they can guarantee results, etc. However, I am doubtful of those claims. And in my experience, whether you will get a loan modification depends mainly on who your lender is (servicer) and who the investors are behind the loan. Since you already have the loan and are in a bind (i.e. can’t refinance), you can’t do anything about who your lender is now; who you have is who you have. Some lenders are reaching out to their borrowers and have modifications wrapped up in a week or less. However, I have spoken to homeowners who have spent 18 months working through their lender’s system only to be rejected for the second or third time.
If you’ve already been through the paces and haven’t been able to work out a loan modification, you may want to consider a short sale if you are behind in your payments and facing foreclosure. A short sale may be more advantageous for your credit than foreclosure. Specifically, you may be eligible to obtain an FHA backed mortgage 3 years after a short sale. And importantly, even if you don’t qualify for a loan modification with your lender, you may still be able to qualify for a short sale. If your lender has already rejected your loan modification request, you should consider a short sale before accepting a foreclosure. Call me at (805) 878-9879 today for a short sale consultation.
Tni LeBlanc, JD, M.A., e-PRO
Broker/Owner, Mint Properties
(805) 878-9879, tni@MintProp.com
* This blog does not offer legal or tax advice; buyers and sellers should consult with their own attorneys and tax advisors before entering into a short sale.