If you are fortunate enough to be granted a loan modification, it is such a relief to know that you have saved your home! Almost losing your home to a foreclosure can be a scary wake up call that you hope to never have to go through again. Some people unfortunately do face foreclosure more than once, and when this happens there are many things to consider. One of them is whether you can modify your loan again.
There is no limit on how many times you can modify your home loan. Your lender can use their underwriting process to decide whether you are eligible for a second or third loan modification. Qualifying you for a second or third loan mod will be very similar to how you were evaluated for your first loan modification. The lender will review your income, expenses, bank statements, and taxes, among other documents. It is also a good idea to write the lender a hardship letter, which is not always required but will help them to understand your situation. Your approval for a second or third loan mod could also depend on who your investor is.
Loan Modification Guidelines
If your investor is FHA you should expect for them to consider you for 2-3 loan modifications. FHA limits their modifications to 1 modification every 24 months.
If your investor is the VA you may be considered for 2-3 loan modifications. However, the VA will never lower your interest rate because they must match the government standard of interest rates.
If your investor is Fannie Mae or Freddie Mac you can expect them to consider you for 3-5 loan modifications. If Fannie or Freddie gives you 2 or more modifications they must lower your mortgage payment by 10%, making subsequent modification requests more difficult to fulfill.
If your investor is a private investor, they aren't required to review your modification application. You should not expect to be approved for a modification. You may only ever be approved for 1 loan modification. It is much harder to get private investors to work with you on your loan because as a private investor they do not have to follow any guidelines. They can deny your loan modification if they so choose, which is why a hardship letter is so very important in the case of a private investor.
To find out who owns your mortgage you can use the tools on this website.
Hire a Law Firm to Achieve the Best Possible Outcome
If you are applying for a loan modification, whether it's your first modification, or a second, third, or fourth modification, you should have an expert on your side. Our firm has completed over 7,000 loan modifications for our clients.