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Qualifying for Loan Modification

Posted by Rory Vohwinkel | Sep 10, 2018 | 0 Comments

When homeowners get to a financial place where mortgage payments become difficult, if not impossible, they begin searching for solutions. One popular possible solution to avoid foreclosure is to apply for a loan modification Las Vegas. If you have the right circumstances, this may be an excellent solution to your financial woes. 

CIRCUMSTANCES FOR APPLYING FOR A LOAN MODIFICATION

Genuine, Unavoidable Financial Need 

To have a loan modification application accepted, you must demonstrate that you have a real and unavoidable financial need. If you have simply made poor spending decisions that have resulted in your dire circumstances such as buying a car above your means or overspending on a credit card, your application will most likely be denied. Real, unavoidable reasons that would qualify include job loss, serious illness, disability or the death of a spouse or a child. 

Ongoing, Reliable Ability to Pay 

Remember that banks and other lenders are only motivated to grant loan modifications in order to avoid foreclosures. Lenders lose a lot of money on foreclosures and rack up significant work to sell such properties. Loan modifications are granted to borrowers who can prove they will be able to make a new, lower payment on a regular and ongoing basis. You may be required to show that you have started a new job if job loss caused the financial hardship in the first place. If you are requesting a lower interest rate because you are now disabled, you can illustrate that your new income levels are commensurate with the new rate. In general, an affordable mortgage payment is 31 percent of your monthly gross income. 

Accurate, Honest Application 
Lenders will require and double check loan modification applications and hardship letters. Be sure you clearly, accurately and honestly explain what unavoidable circumstance caused your current need as well as how you will make future payments on a new loan package. Know that your lender will check credit reports and follow up to ensure that your application is accurate before granting you the loan modification. 

Government-Funded Alternatives 

Some struggling homeowners may qualify for a government modification program. Research the government-funded Home Affordable Modification Plan (HAMP) for possible assistance in your situation. In addition, the HUD-approved Credit.org agency offers the Home Affordable Foreclosure Alternatives (HAFA) Program, which provides government assistance for a deed-in-lieu or a short sale. For more details, check out this loan modifications article. 

If you want to see if you qualify for loan modifications Las Vegas NV, you can reach out to a nonprofit housing consultant from a HUD-approved agency. You can also contact Vohwinkel and Associates. This bankruptcy firm can help you evaluate your situation and present you with a complete picture of your options to assist you in making the best decision.

About the Author

Rory Vohwinkel

Rory Vohwinkel began his legal career at one of Nevada's oldest and largest law firms, representing clients in commercial litigation and business transactions. Rory went on to serve as the sole in-house attorney for a national real estate investment and property management company. In 2009, Rory...

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