There’s no shame today in asking your mortgage lender to modify your monthly payment. Getting a home loan modification can be a huge help to homeowners, but the path to loan modifications is one lined with potential hazards.
Making mistakes during the loan-modification process can leave you with a damaged credit score or move you one step closer to losing your home to foreclosure. NADAQ created a list of common mistakes for homeowner to avoid. Here are a few of them:
Many homeowners believe that their mortgage lenders won’t grant them a modification if they haven’t yet fallen behind on their home loan payments. Sources warn this can be a potentially serious mistake. If you stop paying your mortgage-loan payments, your lender might start foreclosure proceedings on your home. Even if this doesn’t happen, your credit score will plummet if you stop making mortgage payments.
Sources indicate that if you fall behind on your mortgage payment by 90 days or more, the delinquent action will remain on your credit report for seven years. That’s as long as some forms of bankruptcy will remain on your credit report.
Another mistake involves the scam artists that that have popped up to take advantage of the many homeowners who are struggling to pay their mortgage bills. These con artists say that they can help you negotiate the loan-modification process, but only for a fee. Some even ask you to send them your mortgage payments.
Don’t fall for the scams. NASDAQ suggests that if you do want to pay for professional help during the modification process, never pay more than $200 or so upfront. You should pay big fees only after you’ve successfully nabbed a mortgage modification. The best-used money in the case of trying to prevent foreclosure is to hire an attorney who specializes in this field.
The modification process works as a benefit for many, but it is a complicated and risk-filled process. To make it work for you and your family, you’ll need to keep careful records, stay patient and keep paying your mortgage bills on time. But one of the biggest mistakes that struggling homeowners make is not relying on experienced legal counsel. A knowledgeable lawyer from your state would know of all the options available to you and advise you on how to responsibly work with your lender.
NASDAQ: “4 Loan Modification Mistakes,” Sep. 9, 2011