loan Modifications, do you have to pay before they get your loan modified

In General Area - Asked by JOE G. - Mar 4, 2010
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Answer(s)

Chris R.
Broker/Agent
Phoenix, AZ

That is entirely up to the bank. Most loan docs have a clause that allows the Bank to modify the note as it sees fit, obviously within certain parameters. Usually, that modification tends to be in there favor. However, I recently had an experience on a home I own in Texas, through HSBC. It was a 5 year, interest only ARM, set to mature and re-amortize this March. I called last March (2009) and told them that although I have a tenant, if I was not able to extend the interest only option, I would have to consider giving them the house back. That was on a Friday. The following Monday, a representative from their "Retention" department called, and without any begging, offered to lower the interest rate from 5.4% to 4.9% and extended the interest only period for an additional 3 years for a one time payment of $400. Furthermore, they re-amortized the loan and dropped the payments the following month, 11 months before the ARM matured. Now, from this month forward, I have 3 years. You have to ask, and ask, and ask. They have the power to do this for free if they want. They weigh the options and the property value. Obviously, if you are severely upside down, the Bank will most likely not want to carry your note on their books any longer and may try and force a foreclosure by not negotiating with you.
James Appleton
The Rudel Company
Phoenix, AX
602-266-5662
james@rudelcompany.com

Mar 5, 2010
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Debra G.
Owner/Investor
Los Angeles, CA

No. You will work directly with the bank and they don't charge. There are services that will charge you upfront to negotiate with your bank. Be careful if you decide to use these services. Generally the bank will reduce your payment for 3 months while they determine if you qualify for the loan mod.

Mar 5, 2010
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Eugene S.
Broker/Agent
Clearwater, FL

Go to HUD.GOV web site, there are several article on loan modification. Type in the search engines, "loan modification fraud", read the articles, in a nut shell, never give someone your money on a promise, read the documents they present to you and get legal advice, or contact HUD for answers. Make sure they are licensed a professional, and never give them money on the first visit. Do your due diligence first.

Mar 6, 2010
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Chris R.
Broker/Agent
Denton, TX

Will obviously be determined by the lender - and the loan documents involved - along with all the facts and data involving YOU and your property situation. Any lender will look at you - your payment track record, value and condition and status of the property relative to the outstanding loan involved, terms of the loan, etc. Any and all are entirely negotiable between the parties involved regardless of the terms of the loan documents. Chris Rosprim, Scott Brown Commercial, Denton, TX

Mar 6, 2010
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