If you can make your mortgage payment, obviously, you should continue making your payments and never modify your mortgage loan. However, given the current economic environment within the United States, many homeowners are being dealt financial hardships that are severely impairing their ability to pay their mortgage loans. As a result, homeowners are faced with the stress of deciding whether to let the bank foreclose or engage the services of a licensed professional and modify their mortgage loan.
Again, we always defer to the proper and ethical stance, which, when considering the 2 aforementioned options, mortgage modification is the choice that should be made. Not only does a mortgage modification allow the homeowner to stay in their home, it maintains the integrity of the mortgagor’s relationship with the lender and, in most cases, part of the modification agreement consolidates all the late payments and defers them to the end of the loan, which will bring the credit standing for the borrower to a current status. Additionally, the costs associated with the foreclosure process and the inconvenience of dealing with all related parties further support mortgage modifications as the most “make sense” option.
The next question is, when should a mortgagor/borrower begin the mortgage modification process? Once it is determined that, as a result of the hardship, future mortgage payment will not be made, the mortgagor should begin the process and engage the services of a licensed professional. According to an excerpt from a recent article in the Wall Sheet Journal…”Trans Union LLC said it expects the number of delinquent mortgages in the U.S. to double next year…”. So, considering the backlog right now in the Loss Mitigation area of most banks, it is safe to assume that the length of time to process a mortgage modification will increase significantly. As such, if inability to pay you mortgage loan is imminent, start the process NOW. The sooner you start the process the sooner your lender will realize you are trying to work a mutually beneficial resolution. The sooner the lender realizes you are trying to work a mutually beneficial resolution, the sooner the lender will decide to work with you and NOT begin/complete the foreclosure process.
This is a difficult time for EVERYONE and the only way to manage effectively in these times is to have clear, concise and open communication. Start early, form your partnership with a LICENSED professional and remain diligent.
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