What is the new formula that lenders are using? Many mortgage loan owner searching for refinance mortgage loan or new plan on loan repayment. There has been a lot of changes made recently to the formula that lenders use to determine if you ‘qualify’ for a loan modification.

One of the benefits of purchasing the DIYLoanModKit is that we have done many loan modifications, and we continue to do modifications for others. In that time frame, we have learned quite allot about what lenders look for in an income/expense ratio.

You see, most lenders had pretty much settled on a specific formula, which they used as a benchmark to determine whether they would consider modifying a loan. This formula was based on a specific debt-to-income ratio, which was customary in the industry.

That’s until a study done at the end of 2008 showed that 60% of all loans which were modified at the beginning of that year had re-defaulted! So the lenders had to make a change to their ‘formula,’ to prevent modifications of loan which were likely to re-default, while still giving a chance to worthy borrowers.

Now it took us a brief period of trial and error before we could ‘figure it out,’ but we finally found the winning combination, and dramatically improved our success rates. You can find this new formula, along with many other nuggets, in the DIYLoanModKit.

However, nothing is certain except change itself! Because just when we thought that we had our formula together, the President went ahead and changed the formula. On Wednesday, February 18th, 2009, President Barack Obama unveiled his plan to help struggling homeowners.

In this plan, up to 9 million homeowners should be able to get their loans modified, either by Fannie and Freddie, or their existing lenders. However, the plan does not mandate compliance, but rather gives incentives to lenders and services to modify loans early.

So what does this mean for you?

Well for starters, you should review the complete guidelines which were released on March 4th, 2009, to see if you qualify. Secondly, since the modifications are still not mandatory, you must still know how to package your deal, so the lender says yes.

First, let me tell you that this is not Rocket Science! But you still to have a little “insider” knowledge to make it happen! Mortgage refinance loan can help reduce loan repayment amount and save interest charge over a long period. It seem to help maximize the total return of buying investment property or rental yield.

Wishing you all the luck in your situation…
Learn more about doing your own loan modification click here.

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