The general concept of both a refinance on a mortgage and modification to a mortgage is the same.  It can change your rate, principle balance and or term which will ultimately affect your monthly payment.  The two biggest differences are that a refinance of a mortgage is a whole new loan that REPLACES the old loan.  A modification to a mortgage is a change to the EXISTING loan based on extenuating circumstances that generally involve negotiations or legal counsel.

Even though loan modification has existed from the beginning of loans made by the banks to consumers for property, Green Credit has revolutionized the concept.  Most companies will look at your existing loan documentation and try to find an error that will violate a RESPA or TILA law.  This is what is called a forensic audit.  Then the modification will be done by leveraging a lawsuit in order to get the loan modified.  This IS NOT our policy.  Green Credit does not sue the bank and we do not do forensic audits.  We feel this is not the best way to get you a payment and a long term solution.  We have done 1000’s of modifications while working with your lender to come up with a positive solution based on what you can afford today and tomorrow.

WHY WOULD I NEED A LOAN MODIFICATION?

This answer is easy.  It is because your mortgage payment is too much for you to afford anymore and you can’t find a refinancing solution that will give you a payment you can afford. Generally you income divided by your mortgage, known as DTI (Debt to Income), should be at 40% or less.  Most are at 50% or higher.  In these extreme circumstances most of the banking institutions would rather work out a long term solution then see you and the property go into foreclosure.

HOW LONG CAN IT TAKE?

The process of a loan modification is difficult.  It is up to the company/lawyer you hire to convince the banking institution that you cannot afford your payment.  This generally is not a cohesive working relationship between the banks and the modifiers due to the extreme volume of defaulted mortgage in today’s crisis.  We believe an honest and straight forward approach with your lender is always the best way.  Each lender is different and each case is unique.  The process can take as little as 30 days and as long as 1 year based on the circumstances.  Remember, even when a bank modifies a loan, they loose money and have to report these losses to investors and insurance companies, while getting approval to modify the note.

HOW DO I QUALIFY?

There is not a system or underwriting guidelines established for one that qualifies or not.  It is a process.  You have to look at your personal finances and decide if your current mortgage payment is affecting your lively hood in a positive or negative matter.  It should come down to smart investing, and proper allocation of income.  If you are not comfortable with your payment and mortgage, then you qualify for a negation with your bank.  The result may be a modification, short sale, or deed in lieu of foreclosure.  It is up to your negotiator and the bank to find a solution.

CAN I DO A MODIFICATION MYSELF?

YES.  Many people have tried and succeeded.  In fact there are non-profit companies sponsored by the government like HUD and ACCO RN that help in these situations.  It requires a lot work, a high level of expertise, and a working relationship with the lender.  We feel we are the best at doing what we do, and we feel you should get help in all cases.  Whether this help come from Green Credit, another company or a government agency it is highly advised.

ARE THERE ANY GARANTEES?

Unfortunately the answer is no.  Because of the severity of the crisis and the volatility of the market, we nor can any company guarantee a modification.  If some does, you should be very skeptical.  It is important to see conversion numbers and sustainability in exiting modifications.  Balloon, forbearance payments for a long period of time are short term solutions are not generally a good way to get yourself back on track.

WHY SHOULD I CHOOSE GREEN CREDIT?

Green Credit was one if not the first company performing modifications at a volume level.  We look at your finances on a holistic approach and save you money on every type of expense you can imagine.  This helps with your long-term financial health and it helps the banks work with you t find the right modification to your existing note.  We have performed 1000’s and continue to expand our product offering to help you today, and tomorrow on many financial fronts.  We have established working relationships with the banks and have streamlines the process from grass roots prospective.  We do advise, before you do choose us, or any other company, it is important to research the company and get the facts in writing.

When would I consider debt Settlement?

Debt Settlement:  Credit Cards bills cannot be paid down within an acceptable time frame or you are unable to amke your minimum payments then a debt settlement plan might be for you.  Debt settlement will reduce your monthly payment and we will settle with your creditors with the funds you have built up in your escrow account. 

This will negatively impact your credit but not as bad and as long as bankruptcy.
The debt settlement payment may be less then the state appointed BK payment.
You can miss payments and pull money back if needed, unlike BK.
You can avoid the stigma related to filling bankruptcy

Credit Counseling CCC:  Though we do offer credit counseling, we DO NOT believe in it.  Credit Counseling will lower your interest rate on your credit cards and not the balance.  During the time period the interest rate is lower, clients will try and pay down the principle.  This does negatively impact your credit and does not have much value in our opinion.

When  would I consider Bankruptcy?

Sale Date:  You have a sale date on your home that the lender is unwilling to extend for a modification.  Filling bankruptcy will stop this process.

Lien Stripping: Removing the 2nd or 3rd mortgage from the title of your home via bankruptcy t have an affordable mortgage.

Business Debt:  Filing business debt and bankrupting you company.

What are the consequences of bankruptcy?

Reporting on Credit:  BK will report on your credit for up to 7 yrs.  This will have a negative impact on your FICO scores.

Credit Cards and Loans:  You may not qualify for new types of credit, like mortgage loans or credit cards.

DEFINITIONS:

Chapter 7
Chapter 7 bankruptcy is preferable for people who do not want to be "locked down" to a stringent budget for up to five years, or who don't have a consistent income stream that is sufficent to pay all monthly bills as they come due.  Chapter 7 is a "liquidation" procedure, which actually works best for most people.  The typical timeline for Chapter 7 is only 90 days start to finish and it works like this:

• You (and your attorney) prepare the "bankruptcy petition package" and file it with the Bankruptcy Court.  The "bankruptcy petition package" is a bunch of forms and information needed by the court.  The purpose of the "bankruptcy petition package" is, in essence, to create three categories of information.
• You list all of your "assets." Assets are the things that you own: cars, house, clothing, household furnishings, money in the bank, etc.
• You list all of your debts:  credit cards, loans, medical bills, car payments, mortgage, judgments, liens, unpaid taxes, etc.
• You list your monthly income and your monthly expense budget:  Monthly income for bankruptcy purposes is wages from your job and any other money that you regularly receive, e.g. unemployment, disability, social security, alimony, etc.  Monthly expenses are all of your normal monthly bills that you have to pay to support you and your dependents like rent, house payments, utilities, car payments, insurance, food for you and your family, taxes, basic necessities, medical and dental expenses, support for children and elders that you care for, and all the other bills that you have to pay in order to live.

Chapter 13
Chapter 13 bankruptcy is a "debt repayment plan" that is designed to allow people to "catch up" on missed house or car payments by making up the missed payments over a period of time. 

It works well for people with regular income and who can pay their normal expenses but have missed house payments due to a temporary interruption in income, such as an illness, a period of unemployment, or other temporary circumstance. 

The benefits of Chapter 13

1. It allows you make up missed house payments over time, but you must have a consistent and provable source of income and be able to make all your regular payments every month, and pay a little extra toward any delinquency.
2. The down side is that Chapter 13 requires you to live on a specific budget for a period of three to five years.  Chapter 13 does not work for people who have a mortgage payment that has "reset" to a higher amount that they cannot afford, or are facing a large debt load that cannot be paid off over a three to five year period.

A short sale and a deed in lieu of foreclosure may end up being the final result in a modification.  What a short sale does it allows the home owner t sell the home for less then they own to the bank they originally got a loan for to purchase the home.  This has become more common as home values have declined as much as 60% in some areas across the nation.  Generally the hardest part of the short sale is working with the lender to get them to accept the price offered by the buyer.  Many factors come into this equation of what to sell the property for.  One major factor is how much the comparable home sales in the area are going for.  Due to a large volume of foreclosures being sold in almost every area, this has caused the selling price to go down.  Another contributing factor is how large of a loan the current buyer can qualify for.  Due to the economic and mortgage crisis, home loans have been hard to qualify for and this had added to a halt in new home purchases.

Usually the final step in avoiding a foreclosure is when the current lender has offered a deed in lieu of foreclosing on the home owner.  This is the lender offering to forego the option of foreclosure assuming that certain terms are met when returning the property back to the lender.  This option is far better than paying for a unaffordable mortgage and or getting a foreclosed on.  As the market matures this option is becoming more popular with many clients looking for a modification.  When the banks offer this to a client, they are generally looking out for the client’s best interest and understand that the client is in an unavoidable situation.