VISIT WWW.ADJUSTMYLOAN.COM FOR EXPERT HELP WITH YOUR LOAN MODIFICATION!

NATIONAL FORECLOSURE TIMETABLE AND HOW IT AFFECTS A LOAN MODIFICATION.

Each states foreclosure timetable is different and there is no strict industry standard.  Your lender(s) can, at their own discretion, file for foreclosure at any time once you start missing your mortgage payments.  You can in theory conduct a loan modification when you are current on your mortgage payments.  It is difficult to do because your lender has little reason to take a loss on income when you are able to make your monthly payments.  Most homeowners get the best loan modifications once they miss a payment or two but if you wait too long, and a foreclosure auction date is set, it becomes much more difficult to complete a loan modification with your lender(s).  If you have already received a Notice of Default, immediately hire an Attorney Based Loan Modification Company such as www.AdjustMyLoan.com to conduct a Forensic Loan Audit and professionally negotiate your loan modification.

Below is a chart from Realtytrac.com displaying the approximate time it takes after NOD is filed for the home to go to the foreclosure auction.  Remember that the Notice of Default (NOD) is generally filed 90-120 days after the account becomes delinquent. (These numbers are an estimate and are subject to change without notice.  Information deemed reliable but does not claim 100% accuracy).

ARIZONA’S FORECLOSURE TIMELINE

Since we are from Arizona and specialize in Arizona Loan Modifications, we will highlight Arizona’s foreclosure timeline in a little more detail. Arizona’s foreclosure timetable is typically 6‐8 months in length. In most cases, the delinquency period lasts 90‐120 days and a Notice Of Default (NOD) is filed. This paperwork instructs your trustee to begin the foreclosure process. From the date that this paperwork is filed until the day you lose your home at auction is exactly 91 days. After your foreclosure auction, there is no redemption period like there is in some states. A sheriff, or the new homeowner that purchased your home at the auction will evict you from the home and it is legally theirs! The chart below gives you a good visual of how Arizona’s foreclosure process works:

You Lender(s) Rationale During The Foreclosure Process

First A Quick Disclaimer…no one is instructing a homeowner to miss their mortgage payments.  In fact, if you are able to make your mortgage payments, then you should not be reading this eBook.  Each borrower signed a notarized document promising to repay their loan within the agreed upon terms and should honor such a commitment if they can.  A loan modification is designed to help homeowners who cannot afford their mortgage payment.  Also, each bank is different.  This section is designed to give you a general understanding of the rational from the banks point of view.  With each passing day, rules, standards, and guidelines are changing.

Homeowner Is Less Than 30 Days Late:

While in theory it can be done, in most cases a bank will offer a loan modification during this period due to the fact that if you can pay your mortgage, why should they take a loss.  The exception of this is if there was some predatory lending violation in their loan documents.  Having an attorney conduct a Forensic Loan Document Review can uncover any RESPA and/or TILA and/or HOEPA violations and then threaten your lender with a lawsuit.  This will typically expedite the loan modification process and get things done even when you are not behind on payments.  Obviously this can get real expensive real quick!

Homeowner Is 30-90 Days Late:

We call this the panic period.  As you begin to miss your payments, the bank slowly switches from customer service mode to debt collector mode.  Depending on your lender, this period can be frustrating and confusing.  Whenever a mortgage goes into default, it gets transferred to a department called loss mitigation.  This department’s sole responsibility is to collect a debt, or at least minimize that particular lenders loss.  Remember, they are not there to be your friend or your coach.  They are working solely for themselves so keep this in mind when they are telling you what options are available.  They will try and lead you in a direction that they want you to go.  Also, at first you will not be dealing with the real decision maker so keep this in mind when you are pleading your case.  More than likely you will have to submit some initial paperwork (your loan modification proposal) and have it reviewed before anyone offers you any solutions.  Don’t be concerned if your bank sends you letters threatening foreclosure.  USE THE THREAT OF FORECLOSURE TO YOUR ADVANTAGE WHEN NEGOTIATING.  What we mean by this is if the bank feels like you have given up and are not emotionally tied to the house anymore, they will be less likely to use scare tactics to bully you around.  Lastly, don’t be surprised when your lender(s) tell you one thing on the phone and then send you a letter threatening you further.  This is common and you should not worry yet.  In Arizona, the foreclosure process generally takes 6-7 months so you still have plenty of time…check your states foreclosure timeline to see where in the process you currently are!  If you decide to hire a loan modification negotiation company, they will supply your bank with a letter of authorization giving them permission to negotiate on your behalf…this will generally stop the harassing phone calls from bothering you! 

The 30-90 days late phase marks the beginning of the negotiation period and you could complete your LOAN MODIFICATION within this timeframe if you are well prepared and a good negotiator.  Typically your bank will start you off offering some sort of forbearance agreement.  A forbearance agreement is a short term (typically 2-4 months) suspension of your mortgage payments to help you get caught up on other bills.  The principal and interest that accrue (called your arrears) will generally be added to the back side of your loan or spread out over the next 12 month period (raising your monthly payment).  Sometimes a temporary interest rate drop is offered (for 1-5 years).  This is considered a “temporary loan modification” and may sound like a good plan at first, but realize that this is a temporary fix that you will have to deal with again in the future.  Once your forbearance period is over, the bank will expect to get paid all of those missed payments, plus interest, plus fees!  Make sure that if you take this solution you get the temporary interest rate reduction along with it.

NOTE: A well developed proposal with proven income and a reasonable modification can be approved in this time period, but do not be surprised if the bank does not pay much attention to you yet.  The point of a loan modification is to avoid foreclosure and since you are just entering into the negotiations, there is little sense of urgency from the banks point of view.

Homeowner Is 91-150 Days Late:

This is the period to get things done.  Since you are doing this yourself, your chance for a successful loan modification is greatest during this timeframe.  Somewhere during this phase a NOD will be filed and your lender(s) will become more desperate to come up with a solution.  By now you should have your proposal completed and submitted to your lender(s) and your negotiating hat on.  Your main focus should be a permanent interest rate adjustment, lengthening of your loan terms, a principal balance reduction to readjust your loan back down to current market values, or some combination of the three.  This may not be possible for every homeowner, but should be attempted.  Do not wait too long to agree on a loan modification…your bank may request a “good faith” payment and more paperwork which you want to avoid.  If they request a few payments just to confirm you ability to pay, make sure they put it in writing that if you make the payments, the modification will be accepted and complete.

NOTE:  Don’t panic if you loan modification is taking longer than expected.  Many lenders will postpone filling the NOD if you are in the middle of a loan modification negotiation.  The key is to start the process immediately after missing your first payment and continually pressuring your lender(s) for an acceptable resolution.

Homeowners Is 150+ Days Late:

Your ability to negotiate a loan modification is not over until the home has been sold at auction however if you are in this period, you should be contacting an Professional Loan Modification company like www.AdjustMyLoan.com.  If you have not done so yet, you have very little time to submit your loan modification proposal to the bank.  At this point, your ability to prove stable income at a level that is acceptable to the bank is your only hope for a loan modification acceptance.  At this point, you should be considering a real estate short sale as a backup plan.  A real estate short sale is the process where you can sell your house for less than what you currently owe.  If you are located in the state of Arizona, and you want to learn more about a real estate short sale, go to www.ForeclosureCounseling.com/arizonashortsale.html.

NOTE:  Loan modification guidelines change weekly and if you were denied a loan modification in the past, it might not be a bad idea to re-attempt it again, especially if your expenses or income has changed.  Also, keep in mind that the bank will try to modify your loan to fit your exact monthly budget.  Remember to include all of your hard and soft expenses and do not leave anything out.  Many homeowners try and show the bank that they cut costs (which are a good idea when writing your hardship letter but not good for your INCOME / EXPENSE worksheet).  Get rid of luxury items such as ATV’s and boats, but it is okay to have high soft expenses such as gas and food each month.  Our end goal is to get your final mortgage payment affordable to you and this is achieved by being generous with expenses.

STOP…DON’T TRY AND DO A LOAN MODIFICATION ON YOUR OWN!

ALTHOUGH YOU COULD DO A LOAN MODIFICATION ON YOUR OWN, WE ALL KNOW THAT YOU BANK IS NOT GOING TO JUST OFFER YOU A LOAN MODIFICATION THAT IS IN YOUR BEST INTEREST!  AT WWW.ADJUSTMYLOAN.COM, WE SPECIALIZE IN LOAN MODIFICATIONS WHERE OUR PROFESSIONAL LOAN MODIFICATION NEGOTIATORS PACKAGE, PROPOSE, AND NEGOTIATE A LOAN MODIFICATION ON YOUR BEHALF.  WE UTILIZE A TRAINED REAL ESTATE ATTORNEY TO AUDIT YOUR ORIGINAL LOAN DOCUMENTATION (FORENSIC LOAN AUDIT) TO UNCOVER ANY PREDATATORY LENDING VIOLATIONS THAT MAY HAVE OCCURED DURRING LOAN ORIGINATION.  IF ANY VIOLATIONS ARE FOUND, WE WILL HAVE MORE NEGOTIATING POWER TO GET YOU THE BEST LOAN TERMS POSSIBLE.  DON’T LEAVE ANY TERMS ON THE TABLE.  IF YOU WANT A PRINCIPAL BALANCE REDUCTION, OR A MASSIVE DROP IN YOUR MONTHLY PAYMENTS, HIRE ADJUSTMYLOAN.COM FOR YOUR FORENSIC LOAN AUDIT AND LOAN MODIFICATION NEGOTIATION NEEDS!