Option 1st Financial Blog

For the past several weeks, my Blog has featured information on President Obama's Home Affordability and Stability Plan. Under this plan, if you own a home and have been late on your mortgage payment, are behind on your mortgage payment, or you owe your lender more than the value of your home, you may be eligible for either a refinance or loan modification. If you are unfamiliar with the provisions of the plan, I would encourage you to review my previous Blogs to educate yourself about the possible options available.

To continue this series in helping homeowners that find themselves in one of two of these situations, this edition of my Blog focuses on the unscrupulous companies, representing to homeowners that they can facilitate a loan modification for an upfront fee, typically in the range of a few thousand dollars. According to the FBI and the U.S Attorney General's Office, beware of these companies. Both agencies are fielding more complaints and pursuing legal charges against such companies that have taken advantage of homeowners already down on their luck and desperate for help to avoid loosing their home.    

First, many of these companies are operating illegally, if they are asking for a fee up front and are doing business in Maryland. If you have been approached by phone or through the mail, please ignore these solicitations! And, if you have already given any company money upfront and you live in Maryland, I would encourage you to contact either the State of Maryland's Attorney General's Office, at 410.576.6300 or 888.743.0023 or the Compliance Division of the Department of Labor, Licensing, and Regulation at 410.230.6100, again if you live in Maryland. 

So, your next question may be, so what should I do if I think that I am eligible for one of the two programs available through the Home Affordability and Stability Plan? First, visit my previous Blog that links you to the self- assessment tool which will give you an indication of whether or not you are eligible for one of the two programs. If you are eligible, it doesn't mean that you are approved; only your lender can approve you for a program. But your next step should be to contact your lender directly!

Your lender will walk you through the process of applying for whichever program is appropriate. Why, there is a financial incentive for them to do so! But, here's a heads up, generally, your lender will require the submission of the following documentation as part of their evaluation process:

• Most recent earnings statement over a 30 day period
• Most recent bank statements over a 3 month period
• A hardship letter, explaining why you are behind on your mortgage, in the case of a loan modification
• The completion of their financial statement which is a record of your monthly income and expenses 

The above requirements is by no means meant to represent an exhaustive list of the documents your lender may require but simply serves as a guide to prepare you for what your lender will probably require at minimum. 

If you think that you might be overwhelmed by the process of negotiating with your lender, there are a number of nonprofit organizations (NPOs) that will assist you for free. You can contact the U.S. Department of Housing and Urban Development (website address http://www.hud.gov/foreclosure/) for their list of approved NPOs. But, you must be patient as so many people are in need of help and therefore, it may take some time for the NPO to get back to you. If time is an issue for you, I would suggest that you contact your lender immediately and negotiate with them directly. 

I hope that you find this information to be helpful and timely. And, as always, best of luck and give a call should you have any questions!

Reminder to visit our home page where you can receive a complimentary copy of the estimated value of your home under the Home Price Index.