I have discussed home mortgages modification, mortgage bailout, credit scores, and even bankruptcy with several friends over the last few weeks. All of them have a similar question and that is “How do I negotiate with a lender if I can’t make my mortgage payment?” It looks like many lenders will work with borrowers, but the fine details are a bit tricky to maneuver. One friend is going through a bankruptcy but wants to keep his home, and now the mortgage lender is trying to work with him. Interesting that the lender did not want to negotiate prior to the bankruptcy. Unfortunately, it appears that you need to be late on your payments in order to qualify for help from some lenders. I found an interesting article that interviewed a family that recently negotiated with a lender.
Indymac has established some rules for qualifying for a loan modification:
1. Mortgage loan needs to be at least 60 days past due.
2. You can’t pay your mortgage and don’t have any way to make your payment. No savings accounts.
3. You can’t file for bankruptcy.
4. A loan modification must make sense to your bank or investor holding your note. The bank won’t modify the terms if you still can’t afford the new monthly payment.
5. Bank will pull your current credit score and also evaluate if you would be a qualified candidate.
It’s unfortunate that you need to be at least 60 days past due to get the attention of your bank. What the family in this MSN article did accomplish is to reduce the monthly payment by a few hundred dollars. The couple still won’t be able to afford the new monthly payment as they have had some serious health problems and job cuts.
Have you tried to negotiate with your lender? Have you been successful with a loan modification?
