Why is New Hope Mortgage Solutions so successful? It’s a great question. Homeowners attempting a loan modification on their own may not fully grasp what it truly entails.
First, let’s address the question of what Loss Mitigation, also known as Loan Modification, really is and how it works. Why would one need a reputable company to assist, and why isn’t it something that can be done independently? Let’s start by clarifying what Loss Mitigation entails.
What is Loss Mitigation?
A Mortgage modification is essentially a modification to an existing loan made by the current lender in response to a borrower’s long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate, an extension of the loan term, a different type of loan, or a combination of these adjustments.
It’s important to differentiate between a loan modification and a forbearance agreement. These are two distinct types of agreements. A loan modification is a long-term, permanent solution for borrowers facing an inability to repay the existing loan. In contrast, a forbearance agreement provides short-term relief for those experiencing a temporary financial problem.
There are seven top reasons why a loan modification might be suitable for a homeowner:
1. Inability to refinance due to loss of equity, owing more than the home is worth.
2. Inability to refinance due to lack of positive credit or late mortgage payments.
3. The current rate is adjusting or going to adjust.
4. Having a “Pick-A-Pay” or Minimum Payment Interest-only Loan.
5. Suffered a financial hardship (job loss, pay reduction, medical bills, divorce, etc.).
6. Currently facing foreclosure.
7. Inability to afford the current financial situation.
If any of these reasons apply to your situation, attempting a loan modification is advisable. While it can be done independently, it’s crucial to note that only 10% of homeowner-submitted loan modifications are successful. This is often due to incomplete submission of loan modification packages.
Another challenge homeowners face is spending several hours navigating phone trees, repeatedly explaining their situation. This process can be discouraging, and homeowners must call during regular business hours, usually from 9 am to 6 pm. The work doesn’t conclude with one phone call; continuous follow-up is required, and homeowners often find themselves resending information repeatedly.
Companies like New Hope Mortgage Solutions LLC can navigate this intricate system efficiently and without emotional involvement. When time is of the essence, this efficiency is crucial. Dealing with complex and frustrating financial matters, homeowners may seek an economical solution. Various forms of Loss Mitigation or types of Loan Modifications exist, typically involving legal third-party representation, ideally by an attorney on behalf of the homeowner.
Homeowners often lack knowledge of the lender/bank’s guidelines and ratios for qualifying for a full-term Loan Modification. They may assume the lender is inherently in their favor, but the reality is that the bank is an investor, and the rate and payment constitute the investment. Unfortunately, homeowners are often reduced to mere loan numbers in this context.