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If you are one of the millions of homeowners who owe more on their Wells Fargo mortgage than the home is worth, a loan modification featuring balance reduction could be the solution you need.   In fact, this is something that pretty much every homeowner would like-but how do you qualify for this loan modification option?  Actually this option is part of the federal governments loan workout plan, HAMP.   It is officially called PRA-Principal Reduction Alternative.  Some recent enhancements to this option will make it easier for homeowners to qualify for a balance reduction.

Wells Fargo loan modifications are only offered to borrowers who can prove that they meet the strict guidelines for hardship, income, expenses and assets.  A lower interest rate and lower monthly payment are part of the methods used, but additionally the bank has the option to reduce the actual loan balance.  However, this gets tricky because the bank must calculate that this option will actually be cheaper for them than taking the house back.  It’s a bit of a balancing act-and depending on several factors a principal reduction may or may not be offered.

Can you increase your shot at getting a Wells Fargo loan modification featuring a balance reduction?  YES! Your monthly budget figures must be prepared and submitted so that the bank will be able to modify your loan within the standard methods-and so that this modification will be the best choice for their bottom line as well.  Here is how you can increase your chances of qualifying for a balance reduction loan mod:

  1. Verify that your monthly income, expenses and assets all pass the Waterfall Guidelines, and that a balance reduction will meet the program guidelines.  (verify this with the Loan Mod Calculator-a system designed specifically for homeowner use)
  2. Make sure that Wells Fargo has an accurate current market value for your home in their system.  If necessary, provide them with a current market analysis.  Your

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    realtor can do this for you.  This is a case where the LOWER the value of your home, the more a loan mod with balance reduction is an option.

  3. The amount of principal reduction will equal the amount that you are underwater: for example if your home is worth $300k but you owe Wells Fargo $425k, the most they will reduce the balance would be $125k to achieve 100% loan to value.  If your loan mod terms require a large reduction than that amount then you will most likely not qualify.
  4. Verify how much of a balance reduction you may be eligible for ahead of time-and make the needed adjustments to your budget figures until you know your figures fit correctly.  The Loan Mod Calculator will show you the Waterfall with any required reduction amount.

Make sure that you prepare your Wells Fargo Loan Modification application correctly in order to have a good shot at approval and to get a balance reduction.  It’s really about a mathematical formula-if you can pass it, then you are on your way to success.

Get the real answers you need-use the #1 selling kit designed specifically for homeowners.  The Complete Loan Modification Guide kit and Loan Mod Calculator will

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automatically compute and display your own specific budget requirements for income, expenses and assets.  The WaterFall Method will display your new loan terms, including any possible balance reduction.  Fine tune your figures ahead of time and PASS the guidelines.  Visit today.

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