I am guessing that you are reading this because you want to try and modify your home loan. Who wouldn’t? Getting the bank to lower your monthly mortgage payment is almost like hitting the lottery.
A home loan modification is a new contract to modify your existing mortgage. A new note is not created, instead you are modifying the terms of your existing note.
This hardship remedy can be applied to all types of mortgages including lines of credit. If a bank says they can’t or don’t modify a particular type of loan its because they don’t want to help you.
Hardships are largely based on of your gross income not your take home pay. They don’t consider unsecured debt like credit cards and for the most part don’t care about your medical bills. It all comes down to is a percentage of what you gross per month. Banks and programs use a percentage between 32% and 45%. These numbers were also used by the bank when you first qualified for the loan. It is referred to as DTI or debt to income ratio.
Debt to income ration is calculated in
two ways: front end and back end. Front end DTI is what is described above and equals just the mortgage payment divided by your gross income. Back end DTI is all of your mortgage payment combined with all credit bureau reported debt payments divided by gross income.
Some people may thinking why not just give everyone who is struggling a mortgage payment that is 38% of their gross income and move on. It’s a great socialistic thought but is it right? Do you believe that you are entitled to a modification? Are you entitled to anything? I don’t think you are. This site and blog are here because I want to help people that truly need it and give those people who are scamming the system something to think about.
If you went out and racked up a bunch of debt and spent money recklessly and now want your loan modified, this isn’t the website for you unless you want to scam the system. I don’t condone nor would I want you trying that where I work, but you make your own choices. I am simply giving you information. What you do with it is one you.