Whether ‘tis nobler in the mind to suffer the slings and arrows of outrageous fortune or to take arms against a sea of troubles…

We are all aware of the Shakespeare play Hamlet that discusses the internal battles of suffering, but isn’t this exactly what’s happening through the Loan Modification process?

Your mortgage lender asks you to submit all this paperwork in order to get the Loan Modification process, only to tell you that you don’t qualify, or the math doesn’t make sense.  Here it is in a nutshell:  If you don’t have your principal balance reduced, even if you are approved for this modification, it is pointless.  There have been many instances where the loan modification actually increases monthly payments.

31% of your income is allotted to your mortgage payment through a loan modification.  The math is very easy.  Here is an example:  If you make $5,000 / mo. verifiable monthly gross income, and you have a $250,000 loan balance, you will not qualify for a loan modification based on the math.  The most you can qualify for in this scenario is a $1,550 / mo. payment, and unfortunately, modifying the loan to a 5% fixed interest rate puts the payment above your qualification.

If it is simply part of the process in order to find a solution, it makes sense, but the agony of relying on something that inevitably is not going to happen, and to find out at the final hour before your property is scheduled to go to auction, doesn’t leave a feeling that your lender is really working with you.

Make sure of two things: 1) You never pay for a Loan Modification up front, there are services you can use for free and 2) you have taken the necessary steps as a backup, because according to all the statistics, most of which can be found all over the internet, the majority of Loan Modifications do not get approved, but there is always another solution, provided you’ve done your homework.