Know You

The financial facts are an important piece of what lenders look at when considering a loan for modification. Sounds like a no-brainer right? Well, think again. One thing I’m constantly being asked is what to say to questions about income, and/or expenses. Things that should be readily known by the homeowner. So before you start babbling to your mortgage company, and pulling figures out of thin air, take some time and actually do the math beforehand.

Try to keep in mind that every time you say a number, or a dollar amount on the phone with your lender, two things are happening: The rep you are speaking with enters that number in the appropriate field, where it is viewable every other rep who opens that file, ad infinitum. And second, it is being digitally recorded on the audio recording system that they use to record ALL phone calls, both incoming, and outgoing.

Beyond that, if you don’t give accurate figures, it makes it hard to come up with a loan mod product that will actually benefit you. If the financial data you give shows that a $200 payment reduction will put you back in the black, even though in actuality you are in a $500 monthly deficit situation, guess what? The program you get offered will not really help you.

You need to sit down, and draw up a list of every source of income you have, including the $150 a month you make selling widgets on eBay, and make a thorough list of all of your expenses. All of them. And not just the car payments, credit cards, utility bills, membership dues and insurance payments. If you can’t go a day without a Venti double half-caf mocha chi latte, then that needs to be counted in your expenses as well.

Once you have the lists, go over them again, and then one more time to verify that it is an accurate picture of your budget. If the expenses outweigh the income by a substantial margin, then start to cut expenses, or figure out a way to bring in more money. If you are over-spending by $1000 every month, you will not get a mod, because no matter what your payments are lowered to, you still won’t be able to afford them.

 In the end, you want the list to be at least even, and maybe a little on the positive side to ensure you get the best deal available, but above all, know where you stand before you make the call.