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Victor Barraza
Victor Barraza
Cell :  (209) 541-9229
Direct Line :  (209) 491-3886
Email :  vbarraza@pmz.com
Languages :  Spanish
DRE Lic. No :  01044484
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Loan Modification Information

 
What is a loan modification?  Whether it’s called a loan modification, mortgage modification, restructuring, or workout plan, it’s when a borrower who is facing great financial hardship, having difficulty making their mortgage payments and is facing foreclosure, works with their lender to change the terms of their mortgage loan to make it affordable. 

In today’s real estate market, too many home owners are in a situation where they owe more than their home is worth.  Combine that with reduced wages, or a job loss or other financial problems and the result has been that many have stopped making mortgage payments and are unsure of what to do next!

It is important that you understand that you do have options.  Please be sure to explore those options with an agent that has the experience and understanding to consider all the pros and cons in order to properly advice you as to what to do.  Too many people act on the first thing that comes to mind and it may be a great short term solution.  Victor Barraza is here to explore all areas of your situation, then come up with the best solutions and to advice on the pros and cons of each solution including what’s best short term and long term. 

Victor has handled many transactions of this type and is considered one of the few true local experts.  If you are in a difficult situation, below is some information for some of the options that are available to you.  We also have some informational links for you to look into and become more familiar with a loan modification.  Please take a look and call me so we can discuss your specific situation and so we can get you on the right path.

Foreclosure; it is the easiest thing to do being that all you have to do is stop making your mortgage payments… nothing else.  But, do not let your home go to foreclosure before you call me so you can learn about the pros and cons of a foreclosure… before you head in this direction, we absolutely need to explore all other options.

Loan Modification; this option is perfect for some homeowners because if approved, it allows you to stay in your home and sometimes with a reduced monthly payment.  On the other hand, very few people explore all the pros and cons and sometimes unaware, homeowners may later be impacted in a negative way.  Before you decide if a loan modification is right for you, learn about the facts that the loan modification department may not clearly bring to your attention.  For example, most loan modifications do not include principal reduction so although you may get a reduced monthly payment, your mortgage balance may not be reduced.  If so, it may be many years before your home’s value is as high as the mortgage balance.  That means that years later when the value catches up to your loan balance, you’ll still have zero equity!

So, if you are going to attempt to do a loan modification, it is critical that you make every effort to get your mortgage company to reduce the mortgage balance to an amount similar to today’s value of your home.  Also, be careful, many loan modifications may extend your loan to 40 years, some may reduce the principal balance some for now but will expect you to pay for it once you sell your home and there are other things to watch out for!

Scams; there are currently many loan modification scams going on, if a loan modification is the best path for you, be sure to first deal directly with your mortgage company or to get assistance through a government agency.

Short Sale; the Short Sale option will allow you to sell your home at today’s value even if you owe more and you won’t have to pay the difference!  With this option, you will save money because you won’t need to make payments until the home is sold, you will save money by staying longer at your home before you need to move out and pay rent elsewhere, you may get a little money for your moving expenses, and, very important… you will later be able to qualify for a mortgage faster when compared to letting the home go to foreclosure.  Why is being able to qualify faster so important, with today’s real estate market, most people would agree that each year you can buy sooner than later you’ll be buying your next home at a lower price and possibly with a mortgage at a lower interest rate!  Sometimes it is best to just start over!

If you are behind on your mortgage payments… HURRY, call me today for a free consultation to explore your options and to make sure your plans are what will benefit YOU the most.  Be careful, not every real estate agent is successful in getting a Short Sales approved, I’ve had lots of experience and success!

Informational Links

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/faqlm
http://www.makinghomeaffordable.gov/programs/Pages/default.aspx?gclid=COmKjoez8rMCFaU5QgodmWkAWQ
https://www.zillow.com/loan-modification/
http://money.usnews.com/money/personal-finance/real-estate/articles/2009/03/04/obamas-loan-modification-plan-7-things-you-need-to-know
http://www.bankrate.com/finance/mortgages/tips-for-getting-a-mortgage-loan-modification-1.aspx

Victor Barraza, Realtor ®

Short Sale Expert
Hablo Español, 23 years of Real Estate experience
PMZ Real Estate, 1600 N. Carpenter Rd, Suite A1, Modesto, CA 95351
(209) 541-9229

DRE Agent Lic. No. 01044484

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