If you are having financial difficulties again after receiving a loan modification in the past, you might be wondering how many more loan modifications you are eligible for.
The short answer is that how many loan modifications you are eligible for will depend on your investor’s guidelines and who your investor is.
Remind yourself that your investor is the one who owns the debt, not your mortgage servicer or the company you regularly interact with. Since your servicer is speaking for your investor, you should identify them first before taking further action.
You can request information about the investor on your loan from your mortgage servicer.
90% of mortgages are owned by a government-backed investor. Top government-backed investors include the VA, FHA, USDA, Freddie Mac, and Fannie Mae.
Basics of Loan Modifications and Requests
The number of modifications requests you may submit to your lender is unrestricted by law. The guidelines will change depending on the lender and the circumstances of each case. Having said that, if you’re requesting a modification for the first time, lenders are typically more accommodating.
Even though the majority of lenders are aware that certain life events, like job loss or family death, can cause financial disruptions, submitting a second modification request could give the impression that you are unable to manage your finances.
There are guidelines on the number of potential modification requests you can expect to be granted by certain lenders. People with loans backed by the Federal Housing Association (FHA) can generally expect to receive two to three loan modifications, although the FHA will only modify a loan once every two years.
Homeowners with Fannie Mae or Freddie Mac-backed loans can typically receive three to five modifications; however, requests will become harder to fulfill because these entities must reduce your mortgage payment by ten percent if you receive two or more modifications. Since private lenders are not required by law to take into account any modification requests, it is possible that you won’t be able to get a modification at all.
Will a New Loan Modification Improve My Situation?
The terms of your current loan and the terms added by your modification will determine whether or not a new loan modification will improve your circumstances. Reducing your principle or interest rate will generally be beneficial. However, considering the extra interest you’ll pay, just deferring payments might not be helpful in the long run.
For this reason, it’s crucial that you work with a foreclosure and debt defense attorney to help you bargain for the best terms on your loan modification. Further loan modifications may also affect your credit score, which could eventually have an adverse effect on your finances.
Is the Approval Process Different the Second Time Around?
If you’re returning to the lender to request another loan modification, be prepared for a more rigorous and involved approval procedure. The lender may request more information regarding the circumstances that led to your payment default as well as evidence of your ability to make future payments.
A lawyer skilled in managing loan modification procedures can assist you in gathering the required paperwork and constructing a strong argument to convince a bank or other lender to approve the loan modification you require.
Contact a Florida Loan Modification Lawyer
It’s a scary thought to think about your house being foreclosed upon, not to mention the potential consequences if the bank takes back your property. Seek the assistance of Loan Lawyers’ skilled foreclosure defense attorneys to help you avoid this catastrophe. Our team at Loan Lawyers approaches foreclosure and debt defense cases holistically. We’re prepared to engage in tough negotiations to get you the relief you require. Please use our contact form or give us a call to get in touch right now.
Experienced consumer rights lawyers at Loan Lawyers use all of the resources at their disposal to create all-encompassing debt relief plans. Our mission is to shoulder those responsibilities, find solutions to those issues, and let our clients rest easy knowing they are headed toward a brighter future.
FAQ
Can you get a loan modification twice?
It is generally possible to obtain a second loan modification. To put it briefly, the answer to that question is yes. The longer response is that it depends on your unique situation whether you (or any specific person) are eligible for a second modification.
Is there a limit on loan modifications?
The number of times you can make modifications to your home loan is unlimited. Your lender may determine if you qualify for a second or third loan modification through their underwriting procedure.
How many times can you appeal a loan modification?
The person handling your appeal must be assigned by the servicer to someone who was not involved in the initial decision to reject your application. You are ineligible to file an appeal after being rejected a second time. You have 14 days to accept or reject a loan modification offer from the servicer.
What disqualifies you from a loan modification?
Your request will probably be turned down if you lack the steady income necessary to make the new payment under the loan modification. Including your property taxes and insurance, the new proposed monthly payment on the loan modification should be approximately 31% or less of your monthly income.
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