In this current economic climate what results can you honestly expect with an HSBC loan modification? First we have to determine what a loan modification actually is. Simply put a loan modification is when a bank agrees to restructure the terms that a borrower agreed to at the loans origination. The term has become very popular recently because of the incredible number of defaults currently happening.
This is not something that was common in the past, but the current situation has forced banks to take actions that under normal circumstances they would not take. Financial institutions or banks are not in the business of owning and managing real estate. They are in the business of lending money. The way bank regulations have been set up is causing them great harm. For every property the bank takes back they have an official "non performing asset". This reduces the amount of money that the bank has available for new lending. That makes it easy to see why the banks are now willing to negotiate new terms on an existing loan.
So what results can you actually expect from an HSBC loan modification?
1. The first thing to uncover is if your loan actually contains violations. During the run, when everyone was able to qualify for a loan regardless of their income or credit. Many lenders were doing some very shady things in order to get loans approved. If you can uncover any of these activities you might in some cases actually have your loan removed completely. This is rare, but possible.
2. Another thing that might happen is the bank may be willing to lower your interest rate significantly. There have been cases where certain individuals have had their rates lowered to below 1% for the life of the loan.
3. It's also possible that you could get several months of your mortgage payments waived. This will certainly depend on the circumstances of your particular loan.
Can you get approved for a loan modification yourself or do you need to pay a professional to get it done?
The answer is yes. You can certainly request all of the documents for a loan modification and go through the process yourself. There is no law whatsoever preventing you from doing that. If that is something that you are considering simply contact your lender and request the documents for a loan modification. This will save you a lot of money.
It must be mentioned that the process can be very time consuming as well. As there are literally hundreds of thousands of people in a similar situation, hold times on the phone can be incredible. Also, if you do fill out the documents and send them in incorrectly. It's possible that will have to start over from the beginning and lose your place in line.
Professional services have nurtured relationships with the loss mitigation departments at the banks and so in many cases don't have to wait in the same line. Also, they know exactly what forms need to go in and how to properly fill them out without question. If you are searching for a company to work with. Make sure that they have a licensed attorney that you verify with the Bar. Make sure that you are actually able to speak with the attorney and not just an assistant in the office. The attorney should be able to tell you based on your answers to certain questions if you have a case or not. Although an HSBC loan modification is possible, you must be certain to do your due diligence for a successful transaction.
