Mortgage and Insurance Forum

[Alex Chris]

Hello guys!



Asking for a mortgage rate reduction can be tricky business. What lender in their right mind would give you more favorable terms on a contract that you already signed off on? The kind of bank that isn't sure that they have their "i's" dotted and their "t's" crossed, that's what kind!

Asking for an interest rate reduction is still not a simple process. It often takes as long as 6 months for the entire process to take effect and in the interim you can expect to be expected to pay the original rate. Many times, banks won't even work with borrowers until they are delinquent on payments and almost in default. It's only then that the bank realizes that the borrower may indeed be losing their home and in fact needs a mortgage rate reduction. There is a better way, though.

Attorney based loan modification companies are the powerhouse of the loan modification industry. Instead of asking for a mortgage rate reduction, attorneys flex their muscles a little and demand a rate reduction for their clients. This is much more effective.

A few ways that this is accomplished are:

* An attorney sends out a QWR to the lender. A QWR is a written legal document that in effect subpoena the file for review. This lets the bank know that we mean business. It means that the lender must go through their files and send the attorney the originally signed documents from closing for forensic auditing.
* Also, an attorney will send out a letter of representation to the borrower's bank letting them know that they have obtained council. This in turn takes away the ability of the bank to use high pressure techniques to pressure the borrower into paying their inflated mortgage payments. It also removes the right to report to the credit rating agencies while the case is under review. And, in most cases, this can also stop, or at least delay, a foreclosure sale or trustee sale. At this point, any and all correspondence with the bank must be done through the borrower's representative (the attorney).

During the paper filing stage, an attorney generally uses a forensic accountant to go through the original documentation and look for errors and signs of predatory lending. As a side note, I'll tell you that in my office, on average we're finding 9 errors per loan. Once the forensic accountant is done finding errors the attorney can go back to the bank, only this time they'll have a little leverage to negotiate with. You see, every error on a file could cause the bank a fine of up to $2000 per occurrence. So, you can see the amount of leverage this brings to the table.

At this point, there is a significantly greater chance that the lender will grant a mortgage rate reduction, and sometimes, mostly on second mortgages, even a principal reduction for the borrower.

[lora001]

Hi,If you have a home mortgage you can't afford and you want to avoid foreclosure or bankruptcy, there are alternatives to traditional refinancing. By working with your bank to reduce the amount you have to pay each month, you can survive financially tough times and still keep your house. Know your facts, especially about the Making Homes Affordable Law, before going to the bank to request a reduction of your mortgage payments. The more information you have, the better the result will be.
1.
See if you qualify for the Making Homes Affordable Law, which passed in April 2009. It allows people to get a reduction in their mortgage interest rate if their payments are above 31% of their gross income and if there has been a change in the interest rate or a change in employment status. The bank is required to change the rate or restructure the monthly payment schedule.
2.
Decide how much you can pay every month. Banks are often willing to work with borrowers to help them pay off their debts without defaulting, but you need to have a reasonable monthly payment plan in mind when you come in to negotiate. This will help streamline the process and will allow the bank to suggest an alternative payment scheme that is right for you.

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[kindred]

If you can no longer afford to make your monthly mortgage payments, a mortgage rate reduction can lower the interest of your loan down to an amount that is affordable to you. Request loan modification forms from your home mortgage lender. Your income and credit rating will be evaluated to see if you qualify. You will need to keep in touch with your lender on a regular basis to make sure that your rate reduction request moves forward.

[Zippie91]

thanks, that helped me a lot!
regards,
chantal