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Asking for a mortgage rate reduction could be tricky business. What lender within their right mind will give you better terms on the contract that you already signed off on? The type of bank that isn't certain they have their "i's" dotted and their "t's" crossed, that's what kind!
Requesting mortgage loan reduction continues to be not really a simple process. It often takes as long as Six months for the entire process to take effect as well as in the interim you will probably be expected to pay the original rate. Often, banks won't work with borrowers until they're delinquent on payments and almost in default. It is just then that the bank knows that the borrower may indeed be losing their house and actually needs a type of loan reduction. There is a better way, though.
Attorney based mortgage loan modification companies are the powerhouse from the loan modification industry. Instead of requesting a home loan rate reduction, attorneys flex their muscles just a little and demand a rate reduction for his or her clients. This is much more effective.
Several ways in which this is achieved are:
An attorney sends out a QWR to the lender. A QWR is really a written legal document that in effect subpoena the file for review. This allows the bank know that we mean business. This means that the lender must go through their files and send the lawyer the originally signed documents from closing for forensic auditing. Also, an attorney will be sending out instructions of representation towards the borrower's bank letting them know that they've obtained council. Therefore takes away the ability of the bank to use ruthless techniques to pressure the borrower into paying their inflated mortgage payments. It also removes the authority to report to the loan rating agencies while the case is under review. And, in most cases, this could also stop, or at least delay, a foreclosure sale or trustee sale. At this time, any and all correspondence with the bank must be done through the borrower's representative (the attorney).
During the paper filing stage, an attorney generally utilizes a forensic accountant to undergo the original documentation and look for 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.] Once the forensic accountant is performed finding errors the lawyer can return to the bank, only this time around they've got just a little leverage to negotiate with. You see, every error on a file could cause the bank an excellent of up to $2000 per occurrence. So, you can observe the quantity of leverage this has.
At this point, there is a significantly greater chance the lender will grant a mortgage rate reduction, and often, mostly on second mortgages, even a principal reduction for the borrower.