Asking for a home loan rate reduction could be tricky business. What lender within their right mind would give you better terms on a contract that you simply already signed off on? The type of bank that isn't certain they've their "i's" dotted as well as their "t's" crossed, that is what kind!
Asking for mortgage loan reduction is still not really a simple process. Many times, it takes as long as Six months for the entire process to work and in the interim you will probably be anticipated to pay the original rate. Often, banks won't work with borrowers until they are delinquent on payments and almost in default. It's only then that the bank realizes that the borrower may indeed be losing their home and actually requires a type of loan reduction. There is a better way, though.
Attorney based loan modification information mill the powerhouse from the mortgage loan modification industry. Instead of asking for a mortgage rate reduction, attorneys flex their muscles a little and have to have a rate reduction for their clients. This really is a lot more effective.
A few ways in which this is accomplished are:
An attorney sends out a QWR to the lender. A QWR is really a written legal document that essentially subpoena the apply for review. This lets the financial institution realize that we mean business. This means the lender must go through their files and send the attorney the originally signed documents from closing for forensic auditing. Also, an attorney will be sending out a letter of representation to the borrower's bank allowing them to realize that they have obtained council. This in turn removes ale the bank to use ruthless techniques to pressure the borrower into paying their inflated mortgage repayments. Additionally, it removes the authority to report to the loan rating agencies while the case is under review. And, generally, this could also stop, or at least delay, a foreclosure sale or trustee sale. At this time, any and all correspondence using the bank must be done through the borrower's representative (the attorney).
During the paper filing stage, a lawyer generally uses a forensic accountant to go through the initial documentation to check out errors and signs of predatory lending. [As a side note, I'll tell you just how in my office, typically we're finding 9 errors per loan.] When the forensic accountant is performed finding errors the attorney can go back to the financial institution, only this time they've got a little leverage to negotiate with. The thing is, every error on a file might cause the bank a fine of up to $2000 per occurrence. So, you can see the quantity of leverage this brings to the table.
At this time, there is a significantly greater chance that the lender will grant a home loan rate reduction, and often, totally on second mortgages, even a principal reduction for the borrower.