1. Do you have to be delinquent on payments to qualify for a Loan Modification?

   No. It benefits borrowers to stay current with their mortgages or at least continue to make partial payments on their loan before and during the review process. Missing payments will only incur late charges and accumulate a delinquent balance. There is some truth though that if you are already delinquent, lenders will notice your file quicker than a customer that is current (depending on your lender). Priority is given to delinquent borrowers in order to prevent foreclosure proceedings. Some lenders will not even consider your request for assistance unless you are at least 2 months behind on your payments, but we do not advise customers to intentionally fall behind as this will have a negative impact on your credit.

2. What are the chances that I can use this system on my own and receive an approval?

   Extremely high. Applying for a loan modification can be a very simple process if you know what you’re doing. Remember, your lender does not intend to lose you as a customer so they will be very willing to work with you. You will be provided with step-by-step instructions plus some helpful hints and tips that should answer any questions you may have. If for some reason you experience any difficulty along the process, simply email our support team at support@casprocessing.com and one of our underwriters will assist you to get your file back on track.

3. What should my FICO/credit score be for me to qualify?

   There is no minimum credit score required whatsoever.

4. Will a loan modification have a negative effect on my credit?

   No. Loan Modification will not have a negative impact on your credit. The only time your credit will be affected is when you miss a payment.

5. Can the bank give me a principal reduction?

   Rarely do banks grant a reduction on principal balance, although some lenders such as Wachovia do grant significant reductions regularly. No extra work is required for this except for you to stay in touch with your lender and ask if principal reduction can be an option for your case.

6. What rate adjustment can I expect from my lender?

   It’s usually a case-to-case scenario. Each Loan Modification is completely different from the rest. Generally, you can expect a very large rate reduction if you are currently in an ARM (adjustable rate mortgage) with an interest rate over 8%. When you are approved for a loan modification, you will receive a fixed rate mortgage. No more adjustables. Usually modifications are for 3-5 years and anywhere between a 2-6% interest rate. Nowadays, it is more common for lenders to grant new 30 year fixed loans just like a refinance. If you are already on a long term loan with a relatively decent rate (such as a 5.75% 30-year fixed) but still have difficulty meeting your monthly dues, you will receive a payment reduction if you can substantiate justifiable hardships.

7. What if my home is already in foreclosure and scheduled to be auctioned or put up for sale?

   Loan modification is the procedure lenders look at to avoid foreclosure. If an auction or sale date has already been scheduled, it is not yet too late. Sale dates can always be postponed over and over again until your Loan Modification is complete. Then the sale can be cancelled.

8. Will my lender adjust my loan to a 30-year fixed?

   Yes, to make modifications more workable, most lenders grant long term modification. But if you are already in a long term loan, most likely you will get a fixed modification for the remainder of the loan term.

9. How long does it take to get a loan modification approval?

   It depends on your lender and how they work with clients. Some are just quicker than others. Generally, the process can take a month or two, but sometimes you have to wait for 3 months or more. It depends on the volume of applications your lender is handling at a certain time, so it’s best to be in constant touch with them for any update.

10. If I had been denied of loan modification on a previous application, am I able to re-apply?

    Yes. You may continue to re-apply until you get an approval but it is noteworthy to adjust your proposal terms and eliminate the reasons for your initial denial.

11. Can I apply for loan modification on an investment property?

    Yes, there are some lenders who allow investment properties to be modified, but some investors (company that holds the note on your mortgage) do not allow customers to modify their loans.

12. Does hiring an attorney better my chances for an approval?

    Hiring an attorney to do the loan modification is not necessary these days. Lenders themselves prefer to speak directly with the homeowner and the process can be very simple if you know how it works.

13. I don´t have a regular job. I am self-employed. Can I qualify?

    Yes you may qualify. Your borrower will ask you to provide a Profit & Loss statement in place of pay stubs along with bank statements to prove your income.

14. Can I consolidate my first and second mortgages?

    Unfortunately you cannot. You may modify each loan separately and the procedure for both mortgages is just the same.

15. What´s the difference between a Loan Modification and a Refinance?

    You are simply modifying an existing loan when you do loan modification. As opposed to a refinance in which your loan takes on an entirely new identity with a new lender most probably, your lender and account number do not change in a loan modification. You are not allowed to consolidate debt or do a pull a cash-out from a loan mod which you can do in a refinance.

Important Note:

Lenders are changing requirements and results on a daily basis in this current economic market, so it is important that you contact us with your specific situation to get an up-to-date opinion of your potential results. Please refer to these FAQs as a guideline only, and know that they are definitely subject to change.