The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Get Help
    • Money Coach University™
    • Books
    • Financial Coaching
    • Speaking
    • The Money Coach Recommends™
  • Contact
  • Building Wealth
  • Investing
  • Credit Scores
  • Student Loans
  • Paying for College
  • Saving Money
  • Real Estate
  • Credit Card Debt
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Get Help
    • Money Coach University™
    • Books
    • Financial Coaching
    • Speaking
    • The Money Coach Recommends™
  • Contact
No Result
View All Result
The Money Coach
No Result
View All Result

Should You Cancel a Loan Modification?

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Real Estate
Reading Time: 2 mins read
mortgage loan modification
22
SHARES
363
VIEWS
Share on FacebookShare on Twitter

Q: We started a home loan modification in june. We didn’t have to make payments for 3 months, then we paid our required 3 trial payments.

Now after many calls, faxes and paperwork requests, we have been told for 2 months that our loan is “in review.”

I’ve heard that others in our situation have received foreclosure notices or had their credit ruined. Should we cancel our modification before we get any deeper?

A: I would not recommend canceling your loan modification at this time. You have already complied with your bank’s multiple requests for income verification, documentation about your expenses, and other paperwork.

Additionally, you have successfully completed what is perhaps the most important part of the loan modification process – the three month “trial period” in which you show your bank that you can make on-time payments with a mutually-agreed upon, reduced monthly note.

The Impact on Your Credit Rating

I know you may be worried about the potential impact on your credit – especially if the bank rejects your application for a modification.

But the truth of the matter is that you’ve already been through a process where you did not make payments for three months (as the bank told you to do in order to qualify for a loan modification).

If your bank was going to report you as “late” to the credit bureaus, they’ve probably already done it. So halting your loan modification would not “undo” any potential damage to your credit rating.

You can and should check your credit files with Equifax, Experian and TransUnion to see whether or not your lender has reported you as having been late. If so, there’s really nothing you can do erase those credit blemishes.

If not, count your blessings and try to be patient amid what I know is a very trying, overly time-consuming process. Unfortunately, with more than 3 million foreclosure filings expected in 2010, banks (and the government) are overwhelmed by the sheer numbers of people currently seeking home loan modifications.

Why Foreclosure is a Not an Imminent Threat

You also need not worry unnecessarily about an unexpected foreclosure notice. Foreclosure proceedings don’t happen overnight.

And before banks begin the process of foreclosing on a home, they usually contact the homeowner many times demanding payment of what’s owed or what’s past due.

In your case, you seem to have had many, many contacts with your bank and no demands for immediate payment or payment in full.

So just keep doing what you have been to keep good records, document everything, and regularly check in with your bank for routine status updates on your application for a modified, reduced loan.

Even if the bank does surprise you with a nasty foreclosure notice (which doesn’t seem very likely), based on the other financial circumstances you described (namely, that you have recently began making your normal monthly payment), the fact that you have the financial ability to make your usual payment would help you to fend off a foreclosure proceeding and negotiate with the bank to stay in your home.

Tags: Foreclosureloan modification
Previous Post

My Husband Is Planning to Work Overseas Soon. How Will This Impact Our Taxes?

Next Post

Loan Refinancing Options for Veterans

Related Articles

buy a house
Covid-19

Should I Still Buy a Home During the Coronavirus Pandemic?

by Lynnette Khalfani-Cox, The Money Coach
Couple celebrates after buying their first home because they followed a home buying guide
Real Estate

3 Home Buying Hacks to Buy a House in 2020

by Guest Blogger
AskTheMoneyCoach- HELOC
Loans

Is a HELOC Right for You? Pros, Cons, and Considerations to Make

by Guest Blogger
homeownership
Real Estate

Hidden Costs of Owning a Home

by Lynnette Khalfani-Cox, The Money Coach
Lynnette Khalfani-Cox - Homeownership Smarts
Real Estate

Are You Ready for Homeownership?

by Lynnette Khalfani-Cox, The Money Coach
tiny home
Real Estate

Should You Downsize to a Tiny Home?

by Lynnette Khalfani-Cox, The Money Coach
selling your home
Real Estate

5 Tips to Save Money When Selling Your Home

by Guest Blogger
mortgage terms
Real Estate

5 Confusing Mortgage Terms Explained

by Lynnette Khalfani-Cox, The Money Coach
Lynnette Khalfani-Cox
Real Estate

Video: Risk of Buying Real Estate for a Tax Purpose

by Lynnette Khalfani-Cox, The Money Coach
Next Post
veteran

Loan Refinancing Options for Veterans

About

Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, speaker, and author of 15 money-management books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.

Lynnette has been seen on more than 1,000 TV segments nationwide, including television appearances on Oprah, Dr. Phil, The Dr. Oz Show, The Steve Harvey Show, Good Morning America, The TODAY Show and many more.

Quick Links

  • Money Coach University
  • Lynnette's Personal Site
  • The Money Coach Corporate Site
  • Video Portfolio
  • Privacy Policy

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2022 TheMoneyCoach.net, LLC. All Rights Reserved.

No Result
View All Result
  • Meet Lynnette
  • Money Coach University™
  • Books
  • Financial Coaching
  • Speaking
  • The Money Coach Recommends™
  • Media Kit
  • Contact

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist