One of the biggest mistakes you can make in a loan modification is to ignore the rules. Do your homework and be educated before you begin the negotiating process. A loan modification is too important to make any mistakes. Here are some do’s and don’ts:
#1. Tell your spouse/significant other: In most cases you can’t legally negotiate a loan modification without your spouse. You and your spouse are in this together.
#2. It’s not too late to act: You still have a chance as long as you live in your home.
#3. Don’t go into hiding: Your lender needs to hear from you or your legal representative and know that you are working on a solution.
#4. Your lender wants to resolve the situation: The only way your lender gets paid is if you make the monthly payments. Foreclosures are expensive for the lender.
#5. Do seek legal representation: An experienced attorney or loan modification expert can help make sure your loan is modified to an affordable level. He/she will protect your interests and can negotiate better terms than you can do yourself.
#6. Beware of scams: Yes, there are scams out there. Do your homework and make sure you are working with a legitimate person or company.
#7. Know your rights: Some mortgage contracts may have violated one or more lending laws. These violations can be leveraged in your favor. Your attorney or loan modification expert can help you here.
#8. Have a backup plan: Not everyone qualifies for a loan modification. Have a plan B. If you can’t get your loan modified, you may want to consider a short sale.
#9. Remain focused and don’t stress too much: Yes, this is a very stressful time but realize millions of others are in the same situation. Be good to yourself and to your family.