Loan Modification Services

If you are facing a large increase in your monthly mortgage payments, or cannot afford the payment you have now, consider a loan modification with your current lender.

A Loan Modification will change the existing mortgage note and give the client a fresh new start in managing their home. Accounts will be brought up to date immediately.
With a loan "modification" you take the mortgage you now have and change the interest rate and payment requirements in order to achieve a fixed rate. A change in rates and payments does not usually result in the need for a new Closing, Legal Fees, Survey, Appraisal, or Taxes.
Lenders are willing to negotiate when Clients are facing financial difficulties and can't obtain other financing alternatives. North State Financial can assist you by showing the lender why it would be in the lender's best interest to agree to a workout arrangement. In turn, the Lender will reduce the loan interest rate, reduce monthly payment amounts or change other loan terms to allow for an affordable loan to allow the homeowners to avoid foreclosure.

What are your options?

Reinstatement - Pay the Mortgage Company all of the back payments to bring your mortgage current. This option is rarely attainable. The Mortgage Company will add late fees and Attorney fees on top of your back payments making this amount much more than people are able to come up with.

Workout - We can negotiate with your Mortgage Company to bring your loan back in good standing. There are many options available to us to get a work out approved. Some examples are as follows:

Forbearance - We will be able to arrange a payment plan based on your financial situation. This is mostly used in the instance of a tragedy or temporary loss of employment.

Loan Modification - We may be able to adjust the terms of the loan to meet your financial situation.

Partial Claim - You may qualify to have the repayment amount applied to the end of the current loan and resume normal payments.

Sell Your Home - You may simply sell your home before the Foreclosure Sale Date. Sometimes the Home Owner is unable to sell the home outright at the desired sale price and this is not an option. We may be able to negotiate a Short Sale on your behalf with your Mortgage Company. In this instance the Mortgage Company may take less than what you owe on the loan to avoid a lengthy and costly foreclosure process.

Deed-in-lieu of Foreclosure - We can arrange for you to simply give the home back to the Mortgage Company and walk away with a clean slate.

Bankruptcy - This is a last resort. This will only save your home temporarily. If you miss one payment during this process the lender will put you right back into foreclosure. This is like putting a band aid on a bullet wound... we will still need to come up with a permanent repayment solution to get your house payments back on track. We can put you in touch with an Attorney to file the necessary paperwork.

Foreclosure - You may elect to allow the home to be entered into Mortgage Foreclosure. This is the most damaging to you. The Mortgage Company will take your home and all of your equity. If there is no equity they may come after you to pay the shortage or “deficiency”. This is also the most damaging to your credit and your ability to acquire another home loan.

It is important to note that the Workout Options available to you may be limited dependent on the following factors:

1. The type of loan that you have
2. Which investor holds your note, and
3. Which Mortgage Insurance Company insures your loan (if you carry Mortgage Insurance on your loan)

How to prevent mortgage problems

Create a budget and don't stretch yourself too thin. The unexpected can and does happen to millions of Americans each year. For people who live at the far edge of their means, one life event can hijack their lives and lead to defaults on bills and/or mortgage payments. The key is to build a detailed budget of income and expenses, making sure to allow some breathing room to weather an unexpected downturn.

Be very careful with ARMs or Interest-Only loans. These types of loans let borrowers qualify for more expensive homes; but beware as rates (and payments) climb. If you can barely afford the payment on your ARM or interest-only mortgage, you are asking for trouble in a few years when the "teaser period" expires and your loan re-sets to a fixed rate. Be sure you have extra cushion in your budget with these loans.

Don't jump to Refinance your home to pay off credit card debt. Many people faced with large credit card debt or other unsecured debts consider refinancing their homes. But this strategy only moves the debt, securing it with your home. That puts your home is at risk of foreclosure if you are unable to pay. If you are not confident that you can keep up with your home loan payments, consider debt resolution or another debt relief option.

Don’t enter into a Forbearance Agreement. For a temporary hardship, Lenders will grant a Forbearance Agreement to you with out explaining to you that all that does is increase you monthly pay out until you are caught up. Think this way, if you can not pay $2,000.00 a month right now, how will you make a $2,800.00 payment? This is what the Bank will tell you is your only choice when in fact you have other options. If income is there, then and only then would you consider this as an option.

Consider Loan Modification. A Loan Modification seeks a permanent change to the loan, such as lowering the payment and extending the loan's term, or incorporating any delinquencies into future payments.

Obtain a "Deed in Lieu" of Foreclosure. A "Deed in Lieu" essentially allows the Client to return the Title or Deed of the property - giving the home back - to the mortgage holder to avoid foreclosure procedures. This is still a foreclosure or a “Voluntary Foreclosure”.

Sell the home. Selling your home may not be ideal, but it is a way to avoid foreclosure proceedings on your house and pay back your Lender.

Refinance the loan. It may be possible to refinance your mortgage for a lower interest rate and/or lower monthly payment (this is much different than refinancing to take cash out to pay off credit cards). However, if you already have had late payments on your mortgage, the interest rate offered to you may be too high to lower your monthly payment. Educate yourself on current rates by checking online rate comparison sites and using online calculators to determine the real costs of refinancing. These tools are available on a number of Web sites.

Be cautious. Be wary of so-called "Equity Skimmers". If your house is facing foreclosure, you will probably receive numerous solicitations from companies looking to "help" you prevent foreclosure by offering to sell your home for you or by taking ownership of your home. In most cases, these solicitations are scams trying to take advantage of people in difficult situations. The perpetrators aim to snatch the equity you have built up in your home.

In many states, foreclosure rates have already started to increase, especially impacting the segment of the population that carries adjustable-rate mortgage loans, whose payments climb upward with every interest-rate increase. However, Home Owners can make choices, before they purchase a home, but even after problems arise - that will help them keep a home, or at least minimize the damage a foreclosure could have on their futures.