Real Estate

Hello and welcome to Real Estate by Wes Jackson. I, as you've probably already guessed, am Wes Jackson. I'm here to help you with an understanding of loan modifications and avoid a modification scam. How will it help you? The modification process can be rather tedious and difficult if you don't know where to look for answers. You need to know what questions to ask and more to the point who to direct those questions to. Many are finding that their mortgage problems stem directly from morally bankrupt lenders and our declining economy. With the decline in home values, more and more homeowners are finding themselves upside down in their homes and are struggling to meet their mortgage payments. Their income to debt ratio is no longer in balance. A loan modification could be the answer for you. Here we try and give you the answers, updated on a daily basis, that will help you decide. We also give you the facts so you will have an informed opinion about moving forward yourself and do your own free loan modification, contracting a service, or hiring an attorney. Let us give you the latest on Loan Modification and help you on your way to a better mortgage future.

The first step in Loan Modification seems so basic, but it bears stating anyway. Find out who owns your loan. It may seem like the bank you received your loan through owns it, however, it’s not that simple. The truth is that these financial institutions, after giving you your loan, will sell it off in the secondary market and merely retaining the position of "servicer" (the people who send you the bill). There is a greater than 50% chance that either Freddy Mac or Fannie Mae owns your loan. Therefore if your going to do a loan modification it stands to reason that you deal with the person that owns the loan, not the help (i.e. Wells Fargo, Bank of America, GMAC, etc.)

It is relatively easy to find out who owns your mortgage. You can either grab a phone or start down the government maze of phone numbers, which goes on forever, or you can go to Fannie Mae or Freddie Mac's websites, respectively. They are surprisingly effective. If you are one the fortunate ones that have your mortgage owned by Fannie Mae or Freddie Mac, you are included in the American Recovery and Reinvestment Act of 2009. The rules are set forth for you and, at the very least; you have a guideline to follow.

If you are not owned by either of these two entities, your loan modification process will be a little different. In this case you MUST go to the servicer in order to find out who owns your loan. And, just so you know, the rules are different for you.

Let's complicate this even further. Country Wide, the largest loan company in the world and who is now bankrupt, has lost several lawsuits for "Neg Am Loans". This can sometimes make it easier to get a loan modification. Let's sight the example of the state of California. In California there is $6.4 billion set aside to deal with the issue of what the courts have deemed an illegal loan. This money is already paid and is sitting in a trust fund. You should know this before you go to do a loan modification.

One of the more effective ways of accomplishing a successful loan modification is to prove fraud. In order to do this, many attorneys rely on what is called a “Forensic Audit.” And just like in the television program CSI, they go through your loan documents with a magnifying glass, a trained eye and a fine tooth comb to search for fraud. You have to be careful in this situation as the investigation swings both ways. If you misstated your income, the audit it could work against you.

The ultimate objective of a loan modification is principal reduction. This is what everybody wants and this is what everybody is trying to do. However like most things in life, there is only a small percentage of professionals that can accomplish this.