Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually

completed and applicable to the current default episode may be capitalized into the modified principal balance.

Answer: Yes, the mortgagee may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the mortgagor's continued ability to support the modified mortgage payment.

Answer: Mortgagee Letter 2008-21 states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.

Answer: HUD Handbook 4330.1 REV-5, Paragraph 2-1, Section B, Escrow Obligations states: Mortgagees must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage.

Answer: Yes, Mortgagee Letter 2008-21 states that the new basis interest rate is 200 points above the monthly average yield on U.S. Treasury Securities, adjusted to a constant maturity of 10 years.

Answer: If a mortgagor subsequently defaults and qualifies for a Loan Modification, HUD will subordinate the Partial Claim.

Answer: Yes, mortgagees are to perform a retroactive escrow analysis at the time the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.

Answer: It depends upon when the closing date occurred. For assets closed:

After July 1, 1991 but before January 1, 2001, the 7-year unearned premium refund schedule shown in Mortgagee Letter 1994-1 remains in effect,

On or after January 1, 2001 that are subsequently refinanced, the 5-year refund schedule shown in the attachment of Mortgagee Letter 2000-46 applies, or

On or after December 8, 2004, refunds of upfront MIP are eliminated except, when the mortgagor refinances to another FHA insured mortgage. The refund schedule attached to Mortgagee Letter 2005-03 has been modified to a 3-year period.

Answer: Based upon this scenario, the mortgagee should conduct a financial review of the household income and expenses to determine if surplus income is sufficient to meet the new modified mortgage payment, but insufficient to pay back the arrearage. Once this process has been completed the mortgagee should then consult with their legal counsel to determine if the asset is eligible for a Loan Modification since the spouse is not on the original mortgage.

If you are behind on your payments, struggling to make your payments, are already facing foreclosure, or fear foreclosure is just around the corner, then you are a candidate for loan modification. Some Lenders, such as Chase, are approving 98% of the loan modifications that are applied for. Simply put, there has never been a better time to lower your payment, and you don't have to refinance. That means that there are no legal fees, escrow fees, or taxes.

Our experienced loan modification team will work with you to create a detailed financial analysis and hardship package to show your Lender why it is in their best interest to agree to the terms of your new loan. We will negotiate directly with your Lender on your behalf, and keep in close contact with them until an agreement has been reached.

Answers to the most common questions about Home loan modification. We're sure you've got questions about loan modification.....if you're like most people, you've got LOTS of questions.  So, we've compiled a lengthy list of questions and answers as well as Resources and  information about Mortgage Help for Homeowners Under the  Obama  Mortgage Loan Modification Plan.   Learn About Loan Modification for Home loans.  Resources about home loan modification and information about the mortgage loan modification programs. Information about  how loan modification works. Find out how to qualify for loan modification.