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Life After a Modification

You went through some tough times, but you saved your house by going through a loan modification. A Modification is when the terms of the mortgage are changed outside of the original agreed upon contract. You can pay less interest for a while, have the loan extended or the type of loan can be changed. This modification is however, reported to the credit agencies.

So that is all history and now you’d like to test the waters and get a new mortgage loan. Is it safe to jump in? You should wait at least 24 months, making good payments during that time, building equity and improving your credit. Even then if you had a principal balance forgiveness you most likely will not be illegible for a conventional loan.

If the modification was not reported to your credit report, that will help. You’ll need to provide your modification paperwork to your new lender. If you are turned down, try another lender. Fannie Mae and Freddie Mac lenders may be a better option for securing a loan.Selling your current property can help you get a loan. Be persistent!

If you are in need of a modification, don’t be duped into believing you have to hire another company to request a modification. You can just do this with your loan officer, you do not need to pay someone else to do it. Some will even suggest you pay them the monthly payment for your loan, or have you sign over the loan to them. You should not do this, all payments need to be made directly to your bank.

There are some so-called “forensic auditors” purporting that they will examine your loan documents looking for errors allowing you to sue the lender and force them to make modifications to your loan. There is no such requirement for lenders.

These scammers use names and web sites that look official or government-based, they are not. Only your lender can modify your loan. Another lender can not do it.

If you are not sure if you are dealing with the right person or getting the right information, don’t be afraid to talk to someone else at your bank who can clarify things for you!

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