High School physics to the rescue! Let me tell you how inertia...in this case, file inertia...can help you get a mortgage modification.
File inertia is a term I coined after observing hundreds of mortgage modification applications (aka "files") processed by banks. My acute observation and deduction capabilities led me to postulate this breakthrough principle! So, in the spirit of all great "scientific discovery" I will share it with you.
Applications that are in motion tend to stay that way unless acted upon by other forces. Applications that are stopped tend to stay that way. While this discovery may not bring me fame, it has brought my readers lots of mortgage modification success. And, with the acute dissatisfaction with the whole mortgage modification process, that's a lot.
Here is how an appreciation of this new principle can help you help your family. There exists a force in mortgage modification process that is acting upon every application, slowing it down or stopping it altogether. This "drag" is the fact that the banks are overwhelmed. They have been for 18 months and it's not getting better any time soon. So, the system is biased towards rejecting your application for any available reason and sending it to "rework" for updated information, missing docs, missing signatures, missing signatures on missing docs...Whew! Here's how smart applicants deal with file inertia.
For anal retentive types, this will be easy (and, do not read into that statement any insinuation that the whole process has a relationship to excrement). And, for others with less obsession with details, I will make it easy for you. Your application has to be perfect. Not only do you need to provide all the information that is required but you must also organize it and present it in a way that is perfectly understandable to an inexperienced, barely trained loss mitigation agent. Items such as missing documents, unsigned Tax forms, expired form 4506-T and inadequate income documentation make it vulnerable to rework.
Take advantage of file inertia. Make you application perfect by:
1. Document Income correctly and show it clearly. This includes, notarizing self-employed P&L, including annual award letters for SSI and EDD income, showing calculations for monthly gross amounts and explaining precisely how you calculated recent 1099 income.
2. Show rental property correctly. This is especially important if you are applying for a HAMP modification on your primary residence.
3. Your front-end DTI (Debt-to-Income) must be right. This is the total monthly payment on the 1st mortgage (PITIA) divided by your gross household income. It must be greater than 31%.
4. Be sure your back-end DTI (total indebtedness as percent of gross household income) is no higher than 70%. Any higher and you will get bumped (or, at least reworked).
5. Get your credit report (it's free annually at www.annualcreditreport.com). Make sure all current debts are accounted for.
6. Budget bottom line should be zero. That is, show how you spend all the income but do not show your shortfall.
7. In order to be treated within a reasonable time frame, you must be late on your payments. Most banks require that you be more than 60 days late before they stop halting your loan mod progress with their "Immanent Default" shenanigans.
8. Construct it like you are there live, presenting it in person. Include a cover letter, a table of contents page, and notes to clarify every little thing.
If you take these 8 tips seriously you will get file inertia working for you. It can be one piece of high school physics that really pays off for you.
File inertia is a term I coined after observing hundreds of mortgage modification applications (aka "files") processed by banks. My acute observation and deduction capabilities led me to postulate this breakthrough principle! So, in the spirit of all great "scientific discovery" I will share it with you.
Applications that are in motion tend to stay that way unless acted upon by other forces. Applications that are stopped tend to stay that way. While this discovery may not bring me fame, it has brought my readers lots of mortgage modification success. And, with the acute dissatisfaction with the whole mortgage modification process, that's a lot.
Here is how an appreciation of this new principle can help you help your family. There exists a force in mortgage modification process that is acting upon every application, slowing it down or stopping it altogether. This "drag" is the fact that the banks are overwhelmed. They have been for 18 months and it's not getting better any time soon. So, the system is biased towards rejecting your application for any available reason and sending it to "rework" for updated information, missing docs, missing signatures, missing signatures on missing docs...Whew! Here's how smart applicants deal with file inertia.
For anal retentive types, this will be easy (and, do not read into that statement any insinuation that the whole process has a relationship to excrement). And, for others with less obsession with details, I will make it easy for you. Your application has to be perfect. Not only do you need to provide all the information that is required but you must also organize it and present it in a way that is perfectly understandable to an inexperienced, barely trained loss mitigation agent. Items such as missing documents, unsigned Tax forms, expired form 4506-T and inadequate income documentation make it vulnerable to rework.
Take advantage of file inertia. Make you application perfect by:
1. Document Income correctly and show it clearly. This includes, notarizing self-employed P&L, including annual award letters for SSI and EDD income, showing calculations for monthly gross amounts and explaining precisely how you calculated recent 1099 income.
2. Show rental property correctly. This is especially important if you are applying for a HAMP modification on your primary residence.
3. Your front-end DTI (Debt-to-Income) must be right. This is the total monthly payment on the 1st mortgage (PITIA) divided by your gross household income. It must be greater than 31%.
4. Be sure your back-end DTI (total indebtedness as percent of gross household income) is no higher than 70%. Any higher and you will get bumped (or, at least reworked).
5. Get your credit report (it's free annually at www.annualcreditreport.com). Make sure all current debts are accounted for.
6. Budget bottom line should be zero. That is, show how you spend all the income but do not show your shortfall.
7. In order to be treated within a reasonable time frame, you must be late on your payments. Most banks require that you be more than 60 days late before they stop halting your loan mod progress with their "Immanent Default" shenanigans.
8. Construct it like you are there live, presenting it in person. Include a cover letter, a table of contents page, and notes to clarify every little thing.
If you take these 8 tips seriously you will get file inertia working for you. It can be one piece of high school physics that really pays off for you.
About the Author:
Need more "insider tips" to get Mortgage Modification? Visit Rockwood's site about DIY Loan Modification at Home Loan Modification. This article, Mortgage Modification Tips - File Inertia in 2011 is available for free reprint.
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