Loan Modification Questions & Answers

Posted by admin On October - 21 - 2008

Staying awake nights worrying about how you can save your home and wondering if a loan modification might be the answer?  Every day we are hearing more and more about the loan modification option for homeowners stuck in high interest rate, unaffordable home loans.  President Bush and Secretary Paulson have been strongly encouraging lenders to reach out to troubled homeowners and offer a loan modification instead of foreclosure.  Several new programs have recently been launched with government funding and backing to help stop the tidal wave of foreclosures threatening our economy.

You may qualify for one of these loan modification programs.  You don’t want to miss out on the billions of dollars earmarked for homeowner assistance programs.  Now is the time to stop worrying and start learning about how you can qualify for a loan modification.  Are you one of the millions who:

  • Have a sub prime or adjustable rate loan?  If you cannot afford to make the payments due to a high interest rate or a rate that is due to reset, you are a perfect candidate for a loan modification.  Many borrowers were placed in loans they did not understand and could not afford.  There are several programs in place to help borrowers in this situation.
  • Suffered a hardship that caused you to fall behind?  Lenders are willing to work with borrowers who have suffered either a permanent or temporary hardship situation.  Life happens, but with a compelling hardship letter, your lender may agree to a loan modification to help you get back on track.
  • Unable to refinance or sell because you owe more than your home is now worth?  Many areas have seen a 50% drop in home values making it impossible to refinance or even sell your home for what you owe the bank.  While loss of value alone is not an acceptable reason for a loan modification, most lenders would rather fix your loan than take the home because they will lose too much money.
  • Predatory lending victim?  There are laws in place to protect borrowers from unfair lending practices.  You may have legal recourse if you were not provided certain properly executed disclosures or if your final loan payment differed significantly from your original paperwork.  Lenders can suffer severe consequences and the mention of this violation will often compel your lender to offer a loan modification.

You deserve some of the funding and assistance that is now available to troubled homeowners.  Don’t wait-find out how you can qualify for one of the new loan modification programs.  More and more lenders are reaching out to homeowners in trouble.  Don’t be taken advantage of again-now is the time to take control of your financial future.  Take the time to learn about your options and put a plan of action in place to save your home.  An informed homeowner is hard to take advantage of-and after all, no one is going to fight harder than you will to save your home.

You can learn everything you need to know in one low cost, easy to read handbook-The Complete Loan Modification Guide is the most up to date and complete source of home retention information available today.  The Complete Loan Modification Guide will provide you with everything you need to prepare a professional and acceptable loan modification application.  You will receive all of the required loan modification forms and detailed directions on how to complete them, along with hardship letter help, negotiating tips, and informtion about your legal rights.  Thousands of homeowners have gotten the help they needed-you can too!  Stop worrying and get going-order and download The Complete Loan Modification Guide now.

If you would like more information about loan modification options, please visit us at:

31 Responses

  1. Joseph P. Martin Said,

    We have had no response from Wells Fargo yet about our loan modification.

    Our loan number is 0202415659.

    We faxed over all the information you requested, and we have not heard any response yet.

    What’s going on? Please be prompt in responding to this request. We are loyal clients. We have had three mortgage loans with you already.

    Do we have a loan officer assigned to us yet? Please respond.

    Posted on April 19th, 2009 at 2:07 pm

  2. Flora Dongvort Said,

    We just recieved a response from American servicing Company a sister company of Wells Fargo. And now they want us to do a forbearence and pay for 3 months straight without a break in payment but we told them that my husband wages were cut by 30% . We sent in all the requred paper work as they asked and this was back in January when this problem accured. As of 6/24/2009 we get a response as to sign the forbearence agreetment and then we may qualify for a Loan modification. We need our mortgage rate dropped or or extended our loan out for another 10 years. We are 7 months behind in our mortgage, We are filing for bankruptcy or try and get the lawyer to negotiate our loan modifiaction. What do we do now we are being told if we do not sign or follow this agreement they will start the forclosure process. Please help!

    Posted on July 18th, 2009 at 3:33 pm

  3. Gabriella Geczy Said,

    We have requested our mortgage to be modified in February and it took OCWEN 6 months to finally letting us know that they declined our application. The only explanation I got is that our income is not quallified for the program guidlines. We are now 10 months behind on payments, the forclosure process has started. Do I have the otion to appeal against the decesion or reapply for the Home Affordable program is I have my financials approved a little?
    Please let me know,

    Posted on August 12th, 2009 at 11:11 pm

  4. David of Baltimore Said,

    I am with citigroup and they will not modify me. At first it was because I was delinguent, after getting caught up on payments they tell me since I was able to catch up I do not need a modification…This is complete bull shit..

    Posted on October 21st, 2009 at 4:28 am

  5. Mike Maxwell Said,

    There is no reason to deny a loan modification to anyone if the end result is a loss of thousands of dollars to the lender YET THEY DO IT BECAUSE THEY DON’T HAVE ANY FINANCIAL KNOWLEDGE. Any bank that does not make EVERY EFFORT TO KEEP EVERY LOAN ON THE BOOKS ACTIVE SHOULD TAKEN OVER BECAUSE THE MORONS RUNNING IT DON’T KNOW GOOD BUSINESS FROM STUPIDITY. FOR INSTANCE
    Why would a bank NOT give an apartment owner a loan modification???? I know of a 4 plex that is in the rears and the bank will not give the owners a modification. The fact is the APARTMENT carried itself for many years and recently the market changed and the owner had physical problems. They owe over $350000 on the apartment. Presently the property is generating $1800 a month and the payment is $2400. The brilliant individuals at the BofA say no loan modification, The loan is an adjustable and that is even worse as nest year when it cast the rates will change. Just stupid. They could modify the loans interest rate to todays rates, put it on a 30 year term and bring the property to a once again postivie cash flow. They would keep the $350000 on the books and the property owners could keep the proeprty sounds simple to me. NOPE says the DOPE. So the property will be foreclosed upon and sold as a distressed property for $100000 or less, I have an appraisal back ground and the bank has done it’s job!!!!! Please send theses idiots to school. Why do they want to throw away $250,000? These idiots at BofA are not doing their jobs and have no logic or are just a joke. There are many people out there that would save their properties if they delt with real bankers and not just robots.

    Posted on January 7th, 2010 at 10:38 pm

  6. Eileen Stokes Said,

    Citimorgage is a complete get over, I have been working with them for 12 months on my second loan, they pre-approved me to reduce my mortgage down to 50%, each time they assign me to a different payment, I am behind in payments, however, they kept asking to at least have one payment made, if I kept it out of under 180 days they could continue with the modification, I struggled to make that payment, I missed December and now they turned it over to legal, the legal folks are trying to have me to do a settlement and I would have to be taxed on the excess amount of the settlement as income. This is crazy, obvious if I could make the payments I would, so how do I not have the option to continue the modification process with CitiMortgage and now I have to speak to a lawyer who I never received documents from CitiMortgage that the account has been turned over. I think the banks are taking advantage of the customer and it’s not right.

    Posted on January 15th, 2010 at 1:06 pm

  7. Hope Said,

    If you need help with loan modifications go to the HUD website. Loan modification services are free. You should not have to pay for them. On the HUD website you can look up HUD approved centers. HUD approved centers are backed by the Housing Urban and Development Department. It means they’re legit and wont scam you. Plus if you do go to a HUD approved center, it is 50% more likely that you will get some kind of help. And remember, modifications are NOT guaranteed. Most loans are investor held so you cannot go asking for principle reduction, interest rate reduction, etc. What the investor decides is what you get. Another important thing is that once you get an offer and you reject it, you may not get another offer or you’ll get a worse one. Avoid scams. Lawyers have no power over getting you a loan modification. IT IS NOT A LAW FOR FINANCIAL INSTITUTIONS TO GIVE YOU A LOAN MODIFICATION. Also, it is you who have negated the loan agreement. One final thing, YOU DO NOT HAVE TO BE LATE TO GET HELP. DO NOT PURPOSELY FALL BACK ON PAYMENTS AS IT IS AGAINST THE LAW. NOT EVERYONE WILL QUALIFY FOR THE MHA (event though it is a joke). Any questions go to

    Posted on January 25th, 2010 at 1:53 pm

  8. Terri Said,

    I have been approached directly by CHASE to have my loan modified. I am current with my payments and have a 798 FICO score. They have offered to write down $250k and reduce my principal from $900k to $650k which is what the current value is. My concern is the impact it will have on my FICO score since they report it as a loan modification and is not viewed as a positive. I have never been late. How can I protect my credit score and still take advantage of this offer? Any ideas???

    Posted on July 6th, 2010 at 7:55 pm

  9. admin Said,

    Wow-that sounds like a Chase Loan Modification most homeowners only dream about! Amazing that they offered you such a large principal reduction and you are not delinquent or facing a financial hardship situation.
    I would recommend asking Chase how they will report this loan modification to the credit bureaus. Since you have never been late, and the modification will be permanent immediately, your credit may not have to take a hit at all.
    The reason most homeowners get dinged is because during the trial modification-usually 3 months-the payments are reported late. Once the modification is made permanent then it starts reporting current again. In the big picture, this is small ding that recovers fairly quickly.
    I would not walk away from this offer-$250,000 is a big chunk of free money-and your credit score will recover even if they report it as a negative. A Chase loan modification is hard to get for many homeowners-count your blessings that you have been offered this chance to get back on track with your home equity position!
    For more information about how to apply and qualify for a Chase Loan Modification you can visit Read pages of free information and learn tips on how to qualify.

    Posted on July 6th, 2010 at 8:44 pm

  10. sandra chafee Said,

    We were with wachovia when we started, we explained that we would be going through a major loss in income three months prior to it taking effect. We hope that by trying to infor and work something out befor it became a problem that we could work something out.We cant begin to explain the tons of problems we encountered Wachovia has to be the bank with the most unprofessional empolyees and work ethics I have ever had to deal with.Six months after finnaly getting a re-fi/loan mod what ever offer it was higher that our original loan.What a joke then when we called in respond were told that to get a “real loan Modification and help we need we would have to fall behind in payments” Wow crazy as it may be and still only making things worse we waited for yet another packet of forms that never came.Long story short nine moths later Well Fargo buys out assumes our on going need for help and to date they dont seem anybetter or wiser,What the heck is going on out there why cant they try and help like they say and are suppose to. They got their bail out. Where do you go from here ? Another bank?? or not.

    Posted on August 31st, 2010 at 1:42 pm

  11. marvin Said,

    what is the lowest rate in a modification.

    Posted on November 15th, 2010 at 5:59 pm

  12. admin Said,

    Hello Marvin,
    It really depends on the lender and the program they offer. I have seen as low as 1% on a Jumbo loan, but generally speaking the federal plan mandates a new rate of as low as 2%. This means that under HAMP your new loan payment could be lowered so that it equals 31% of your gross monthly income, and in order to reach that target payment your interest rate can be reduced down to 2%. Keep in mind that the new payment under HAMP will be principal and interest included. I have seen 1% interest only payments offered on in-house plans too, but usually this is not common.

    Posted on November 17th, 2010 at 6:43 pm

  13. Mark Said,


    Just from personal experience, chase gave you a blessing. YOUR Credit WILL bounce back. In SOME cases, modification will not adversely impact your credit depending on how the lender report it to the credit bureau. I HOPE you did RUN with this offer.

    I Am trying, for over 4 months, to get GMAC to refinance my adjustable rate mortgage into a fixed rate before disaster strikes. IT has been a total HELL on earth experience. I NEVER pay one late payment, I am always on time. I can’t even emagine how they treat someone who is behind on their payments.

    GMAC Mortgage kept requesting the SAME information up to 3 times in one MONTH. I keep sending updated documentation everytime they request it, but they keep gining me the run-around with one lie after another.

    GMAC give me the run-around to the point where my home is now worth less-than what i owe. 5 months ago when I ask GMAC for help I had equity in the property.

    I am still making my payments on time working and praying for a miracle. I just put NEW 30K roof on the house, after 11 years I am NOT going to let the scumbags at GMAC ruin me an put me and my two kids on the street!!!

    Posted on December 27th, 2010 at 12:53 am

  14. Jean Said,

    Well, after 15 long months I finally received my loan modification in the mail today. My trial payments – 8 of them – were less than $48 less than my original mortgage payments. My new modification amount? The same as the trail payments. I went through so much aggravation for $48 a month. How will this help me? I made all my trial payments on time and let everything else go. My husband passed away at age 51 and I lost his $53,000 salary. Unfortunately he had no life insurance. Was this all worth it? No. I thought the average savings was somewhere around $500 a month. The person who told me about this program is paying over $800 less per month. Needless to say, I am shocked and not a happy camper. Happy New Year – not starting out too good for me.

    Posted on January 3rd, 2011 at 3:56 pm

  15. Faith Said,

    I am in a home modification with BOA – trial period for 4 months which my payment went down 400. (my husband had a stroke is now in a nursing home, thus where his income is) I rely on my income alone. My question, will the perm modification be the same? I have heard horror stories that the rate is only reduced sometimes by 100. I cannot afford to stay in my home if it isn’t 400.

    Thank you,

    Posted on February 18th, 2011 at 7:23 am

  16. Ben Said,

    B of A accepted our financial info in March. They said we qualify.
    But it has been over 60 days and still no loan modification in place.

    What is a reasonable time to expect a loan mod to get processed?

    Posted on May 17th, 2011 at 12:27 pm

  17. marie Said,

    trying to get a loan mod with BOA. i was told to list monthly expenses and one of our biggest expences is tuition for our daughter’s education which is $2,100.00 a month. does anyone know if this will affect their decision to modify our loan

    Posted on June 28th, 2011 at 6:43 pm

  18. F. Agostino Said,

    Washington Mutual went to Chase in the middle of the 1st Home loan modification, never rec’d any infromation on what was going on with WaMu, had to re-do everything with Chase. Got to the trial payments for 3 consecutive months, do not miss a payment, this was done and then never rec’d anything after that stating it was approved or not, rec’d registered letter in the mail stating the loan was behind…. please call…. and so on. In the meantime Chase was called several times and was asked why we have never rec’d anything and they said you should have, well, we never did get anything also Chase was asked why in the meantime have we not rec’d a monthly statement, their comment was, well, you wouldn’t rec’v a monthly statement because WaMu never sent you one, ughhh, yes, every month a monthly statement was rec’d. So, we tried for a second Home loan mod and got the paper work in with the application, nver heard anything and after 2 months I called Chase and asked what was going on and they said it was denied due to the original loan holders, i asked who and thet gave me the name of the loan officer from the company that sold us the house, I was like what, that makes no sense at all. The reason we were trying for a Home loan mod was because a lil over 10 years ago, interest rates were really high and they were expecting them not to come down any time soon so we were locked in at 9% and we desperately needed the monthly payment to go down, do to the economy and the death of a spouse so that income was gone and the modification would have helped had it kept on going after the 1st one with the trial payments made but no someone in Chase has screwed a lot of peoples’ home mods up big time and it hurts them something terrible. We are trying this 1 more time to see where we get because we do not want to lose our home none what so ever. if I had $40,000.00 it would be paid off… So, we pray for everyone that has put thier application in for a Home loan modification, that they get it and not get the run around continuously. Those of you that these banks, companies ect.have worked with and gave you a generous break, good for you!

    Posted on July 12th, 2011 at 7:44 pm

  19. Mica Said,

    Most banks don’t plan on modifying your home. They make you go through the big game and throw hurdles in front of you and sometimes even when you over come them, they deny you. My advice to people who haven’t heard a response yet? Keep calling because banks don’t call you. Get annoying, get snippy and be a bother until you get answers. I work in a law office where I deal with loan mods everyday. You get played a lot by banks. It can be hurtful and discouraging. I have gotten used to certain bank systems I know their game and what to expect. Wells fargo is the worrrssttt bank in my experience of wok to do Loan Mods. They are terrible. They denied one of my files a day after I called to check status. ASfter the point of contact told me it was fine and pending review, the closed out the file. be aware, the service reps at the bank will lie to you to “shoe you away”. It’s worse if your a minority or of a different race, it makes it more difficult, studies have shown this. I have so many loan mod horror stories I could write a book, and to be honest I am really contemplating that. I hope my advice gives some cold hard truth of light to some people. Don’t get me wrong I have gotten many files approved as well, it’s just a pain in the @$$.

    Posted on November 15th, 2011 at 11:44 am

  20. Mica Said,

    Ben you probably got entered and approved for trial period. You need to keep calling the bank. They should have sent you something in the mail. This doesn’t mean you are actually getting a loan mod, they want to see your loyalty towards the payments and test you first.

    Posted on November 15th, 2011 at 11:46 am

  21. ccasey Said,

    Wells Fargo says I can not do a loan modification because my mortgage was a consolidation loan. I can’t find anything that says that’s a rule in Texas…can anyone clarify?? they say, “in Texas you can NOT get a modification on a consolidation loan”. It was a consolidation of 1st/2nd lein plus a cash amount for improvements. Seriously?? I can’t find anything!

    Posted on April 14th, 2012 at 6:15 pm

  22. denise Said,

    If you are current and get a modification,does anyone know how many points your credit score could go dowm?

    Posted on August 19th, 2012 at 6:50 pm

  23. Tyler Said,

    I applied for a traditional loan modification on a rental home that I own. I make my payments to GMAC but Fannie Mae is the investor which means I have to qualify for a modification based on their guidelines which I can’t seem to find.

    I got a call the other day from GMAC to inform me that I did not have enough disposable income to qualify. I explained that if I had disable income I would not be 3.5 months behind on my loan. My relationship manager and I went over income and liabilities and we determined that based on my net income which they seem to care more about than gross, I was in the red $180 a month. I said I know… That’s why I need help. She also explained that is not simply that I am $180 dollars in the red but they have to be able to modify the loan down enough to get me out of the red and leave me with disposable income. She explained that each investor has different expectations for how much you need which she would not share with me.

    This is what I am trying to find out if anyone knows.

    I have read several things online about the HAMP and it indicates they are looking for a minimum of $250 disposable income after they modify the loan. Based on my math that means they would have to get my payment down $430. Based on my current rate and balance and term they could do that by simply changing my rate from 6.5% to 4.25%.

    Does anyone know if the disposable income requirements on a traditional modification are higher than HAMP? Or know what they are looking for? Does anyone know if there is a floor rate on a Fannie Mae traditional modification?

    Posted on December 6th, 2012 at 12:08 pm

  24. Carol Said,

    I declared Chapter 7 Bankruptcy in Feb 2008. In Sept of that year I applied to Citimortgage for a loan modification (HAMP). Over the phone I was told I qualified, and that my payment would be $266 less a month. If I made 3 on time payments, I was automatically accepted in the program. I called monthly after the 3rd month. At the end of the 9th month when I called, I was told to expect a letter in the mail. The only paperwork I had ever gotten from them was the original packet to fill out after I applied via phone. I sure did get a letter! A letter of INTENT TO FORECLOSE for the difference in the amount they told me to pay and what my original payment was. I called immediately. I was first told to disregard the letter. This was on Friday. All weekend I thought about this and called back on Monday to speak to the person who signed the letter. Ranger Fairbank. Nobody there by that name, but I was told if I didn’t pay the $2428 immediagely and make my regular payment the next month, they would start foreclosure proceedings. I saw an attorney and told him I wasn’t able to afford the house any longer. He notified Citi as well as the HOA that I could no longer afford to stay in the home. I moved out in Sept 2009. I had the house on the market since April 2008. They never foreclosed even though their attorney sent me a letter that they were. A real estate agent talked me into trying to sell it as a Short Sale. I’ve now lost 6 contracts due to Citi not responding. The people got impatient and sought other homes. Now I have a contract that was signed on May 1, 2012. It is Jan 1, 2013 and I still have no answer from Citi if they’ve approved the Short Sale. I have an attorney who specializes in Short Sales working on my behalf. I have sent the same paperwork in over and over again. I finally called my Congressman and got him involved. He in turn got the Comptroller of the Currency involved. Now I’m afraid that a Short Sale, if it ever goes through, will show up on my credit report, even though my mortgage shows Discharged through Chapter 7 Bankruptcy. I probably should have let them Foreclose, but I thought I was doing the right thing. 2 1/2 years I’ve been dealing with Citi over this. Have I no recourse? I’ve been looking for an attorney who will represent me in a lawsuit against Citi……..I guess everybody is afraid to tackle them. I feel sorry for anyone who is dealing with them! Oh yes, I must mention that even though I’m going through this Short Sale, they still send me material on a Loan Modification! Why? They turned me down. I found out well over a year later, because my payments were not late!!!

    Posted on January 1st, 2013 at 10:18 am

  25. cliff Said,

    I have been turned down for a loan modification.. because I am current with my payment. do I have a legal right to have the cause in writing from green tree llc.?

    Posted on May 6th, 2013 at 3:39 pm

  26. admin Said,

    If you are not currently delinquent on your mortgage loan, but can prove that you are at imminent risk of default, you may still be eligible for a loan modification. There is actually a formula used to determine this “imminent risk of default” criteria-the lender will use the monthly gross income you report, your net income, your current mortgage payment and other monthly expenses as well as any liquid reserves (money in the bank) that you report. If your current financial situation passes this formula, then you do NOT have to be delinquent to qualify for a loan mod.
    So, the trick is to know ahead of time how to report your income, expenses assets so that you have a good shot at passing this part of the approval guidelines. You can use the Loan Mod Calculator to help you with this-the program will automatically compute and display a PASS or FAIL for imminent risk of default, and show you where and how to adjust your budget so that you get a PASS. Then contact your lender with your revised budget figures!
    Visit for more tips and information.

    Posted on May 7th, 2013 at 8:11 am

  27. admin Said,

    The lender is mandated to inform you in writing why you were denied a loan modification. You have thirty days to dispute their findings and submit any documentation to substantiate your case. It sounds like you need to make certain that the financial information you provided a-income, expenses, assets-is going to pass the imminent risk of default criteria. This is a formula that the bank uses when you are not delinquent on the mortgage payments. You can learn how to fine it
    Une your financial worksheet ahead of time – use the Loan Mod Calculator. This program computes and displays all 5 loan mod approval guidelines automatically. You will see a Pass or Fail, then adjust your numbers until everything shows a PASS. Visit for more tips

    Posted on May 8th, 2013 at 12:42 pm

  28. marianne Said,

    I reaffirmed my mortgage why am I getting loan modifications from boa when I didn’t ask for it. Chap 7 was discharged, papers filed for reaffirmation with the court. Do I have apply or can I just. ignore it?

    Posted on June 14th, 2013 at 6:03 pm

  29. susie guerrero Said,

    I have been going threw a loan modification for 3 years and have got nowhere my loan had been sold then I have to start all over my last bank is owens which they have been doing this loan for 8 month to only come up with that the loan modification was denied that they want the interest and penalty up front because they can come up with numbers. don’t know what to do but too have faith that the lord will take care of this matter.

    Posted on November 9th, 2013 at 9:15 pm

  30. connie sanders Said,

    Have free third party helping with modication. They refuse to see correct paper work.. but got that corrected. Now my income has changed. It is less but I am listed on the modification as additional income. How do i address this. I think I need to do another statement on household expense, they has changed to.

    Posted on February 14th, 2014 at 12:24 pm

  31. admin Said,

    Any time your financial circumstances have changed during a loan modification review, you need to re-submit your monthly budget sheet to your lender. Be sure that your monthly income and monthly expenses fit into the approval guidelines-you need to pass 7 approval triggers-the Loan Mod Calculator can help you determine HOW to report your new budget information. Simply input your figures and the Calculator will show a PASS or FAIL, make the required adjustments until you PASS all the guidelines-then submit!

    Posted on February 17th, 2014 at 5:19 pm

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