ModPilot Helps Consumers Work through Trial Periods
ModPilot, Inc. and yourmortgagerights have spent the last two years teaching individuals how to successfully work with and against their lenders to modify their loans without the use of expensive and inefficient third party negotiators or attorneys.
One of the questions that we field most regards whether or not there will be a trial period in the modification offer and how long will the trial be? In reality, there is no firm answer that covers every homeowner’s loan, but there are some guidelines that can be pointed to in determining whether or not a trial period will be required and how long that might be.
The best answer to this question starts by looking at which program your lender is reviewing you for. If they are looking to use the governments Making Home Affordable program, then you will almost for sure have a trial plan first. The Making Home Affordable program modifications require a minimum trial period of three months. This means that after you are approved for a trial modification, your first three payments will be trial payments. This time period allows the lender to verify all of the information submitted to them for the final qualifications and allows them time to verify the amount needed to set up the impound accounts that will be part of your payment. In theory, at the end of your three month trial, you should be moved into a long term modification if your situation has not changed and you’ve made the appropriate payments. In reality, this is taking longer than three months. We’ve seen trials last up to 17 months, but five to six is a more predictable time table.
If however, your lender is using their own “lender specific” loan modification program, there does not have to be a trial. Each investor has their own guidelines that cover modification offers, so it will differ greatly from investor to investor, but getting a fixed rate offer from the very get go is a distinct possibility.
Every homeowner who is requesting a modification from their lender should ask what program they are being reviewed for at the very beginning, this might help take away some of the guesswork.