As I shared in my previous blog post, applying for a loan modification is often a long, daunting and complicated process that leaves many homeowners feeling powerless and “in the dark” while they’re waiting for their bank or lender to decide their fate. And if, after spending many sleepless months and a considerable amount of money on postage and documentation fees, they end up getting rejected, well…let’s just say I know from experience how frustrating that can be. And that’s why I decided to launch Caal—an online software that helps other homeowners understand their options, negotiate better with their bank or lender, and address the many challenges of applying for a loan modification. How, exactly, does it work? Read on.
Part Two: How Caal Can Help You
#1: It tells you upfront whether or not you pre-qualify to modify your loan.
When you input information regarding your loan and finances into the Caal system, the software provides you with a possible loan modification workout that shows you whether or not you “pre-qualify” under the government’s HAMP guidelines and under private loan modification guidelines. Those who pre-qualify can confidently proceed with sending their application to their lender. Those who don’t can explore other loan scenarios using the Caal system, and work on fine-tuning their budgets and finances accordingly. Of course, they could also choose to send their application to their lender even if they don’t pre-qualify, but they may have to keep their expectations low and realistic. And knowing what one can expect and what one’s financial data looks like to a lender is a key advantage of using the Caal system.
#2: It gives you access to proven tips, guidelines and other useful information.
We at Caal have done a lot of research on loan modifications—what kind of documents and forms you’ll need, what guidelines you should follow, what the different financial terms mean, how lenders calculate loan modification workouts, and the like. We’ll share everything we know with you and more, including best practices we’ve learned from our own (and other homeowners’) experiences. For instance, once your bank has received your paperwork, we recommend asking them to assign a representative to your case, so you won’t get bounced from one department to another every time you follow-up with your application. Be prepared, as well, to answer detailed questions and to clarify items on your tax returns and bank statements. But also know when to push back—sometimes, underwriters ask for clarifications that may not be applicable to your case. They are dealing with lots of paperwork and can make mistakes.
#3: It “demystifies” the financial calculations used by your lender when deciding whether or not to approve your loan modification request.
We don’t just tell you what documents you’ll need and how to organize them for maximum efficiency, but we’ll also help you prepare your financial worksheet. This worksheet is probably the most important criteria in getting your loan modification approved (provided, of course, that you can validate what you are claiming on it) because it will help you understand how banks analyze and calculate your financial data, and how they decide on whether or not to approve your request. And if you know what your bank knows, you’ll be able to negotiate better with them!
#4: It streamlines—and simplifies—the application process.
The Caal software provides you with a step-by-step guide to completing your application, from beginning to end, so you’re well prepared once you are ready to submit your application to your lender.
#5: You avoid what I call “applying in the dark.”
The first time I applied for a loan modification, I was rejected…after waiting for seven months. The next time I applied, I researched as much information as I could about the subject and used the Caal software to prepare my application, and Bank of America promptly approved my request. Knowledge, indeed, is power, and I honestly believe that by using the knowledge and tools that you’ll find on the Caal site, you’ll be optimizing your chances for success and will likely avoid the many challenges and headaches inherent in the loan modification process. But you don’t have to take my word for it…why don’t you take a look around and give it a try?
P.S. Are Caal’s results guaranteed? A reader wrote me, wondering if whatever results they get in the Caal system (whether they’re positive or negative) are guaranteed to be the exact same results that they’ll get from their bank or lender when they apply for a loan modification. The short answer to that is no—there’s not one system out there that can do that, and anyone who tells you otherwise would be lying.
Here’s the long answer why: While financial guidelines are standardized (under the government’s HAMP, for instance, the target range for a modified home loan should be between 31 to 38 percent of the homeowner’s gross monthly income), those guidelines, like all other guidelines, are open to human interpretation, and it’s up to the underwriter to decide which percentage they’ll use in calculating your financial data. It’s like passing through airport security or customs—it usually depends on who’s inspecting you, and how they choose to interpret policies and procedures. What Caal guarantees is this: that by using the system, you’ll be better informed, better prepared, and better able to negotiate with your bank or lender for a mutually-beneficial solution…which can then increase your chances for success.
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