Re: Loan Modification Payments not Affordable

by Dean
(St Louis)

What if my trial payment is still too much for me to afford?

Mortgage Loan Modification Answer:

If your trial modification payments are still not affordable for you, you can try negotiating with your bank's underwriter to get to an amount that you can afford.

If you qualified for a HAMP loan modification, your new payments plus property taxes and insurance should be between 31% to 38% of your gross monthly income, and should therefore be affordable.

However, if you don't qualify for HAMP, your lender may put you under one of their in-house or traditional loan modification programs, which, although it doesn't make sense, could very well result in higher payments rather than lower payments, or slightly reduced payments, or could also be as low as what a HAMP loan modification would have gotten you. Traditional loan modifications are entirely at the bank's own discretion.

Be patient and wait for your bank's offer and try not to assume the worst. Once you have the offer in your hands, you can decide what to do at that time. Until then, try not to worry. The good part is you are at the last stretch!

I'll be hoping for the best outcome for you.

If you need help negotiating with your bank, contact me and I'll refer you to someone who can help.

All the best,

Additional Loan Modification Answer:

In addition to negotiating with your lender see what you can do to reduce your insurance cost.

Part of the problem I am seeing is that the home owner insurance rates have skyrocketed. Why?

Most insurance companies use your credit score to determine insurance rated. It is not unusual for rates to be increased by 30 to 40 % or more. All of this is without disclosure by the insurance company. (Law needs to change that). So look at your homeowners insurance and see if your rate can be reduced. Go to your State Department of Insurance. You should be able to get your base rate and compare to what you are charged. Then negotiate.

The mortgage crisis has put homeowners in double jeopardy. Lawmakers are not even aware that this is going on. Insurance is risk based, not credit based and in my opinion should never be allowed to measure insurance risk.

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Jun 20, 2011
not affordable
by: Anonymous

Do taxes and insurance get added after the modification is calculated? I make 3200 gross, my new payment is 942. How is this 31% of my income. Why do they take gross income and not net income, my employer takes out for healthcare etc. This is two weeks check for me. I don't get it. I am so done with this mess. by the time I pay my utilities, gas, groceries credit cards I am in the hole.

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