Distressed homeowners stuck in an unaffordable adjustable rate mortgage should take the time to learn about how to apply for help with a Wachovia loan modification. When Wells Fargo acquired Wachovia for $15.1 billion dollars, it also inherited a troubled mortgage portfolio that includes a high percentage of loans known as Pay Option Arms. These risky loans feature a negative amortization option that results in deferred interest being added to the principal balance. Wells Fargo is motivated to convert these loans into safer, more affordable type loan programs.
The toxic combination of decreasing home values, increasing loan balances and tighter credit standards have left Wachovia mortgage holders painted into a corner. When refinancing or selling the property are not feasible options, homeowners are left with few options-one of the best is a Wachovia Loan modification. But, before you apply, you need to learn some important tips to increase your chance of loan modification help so you can change your risky loan into one that features a low fixed interest rate and an affordable payment.
If you have a Pay Option Arm, you may qualify for Wachovia loan modification help with one of the following options:
Project LifeLIne: A program initiated by Wells Fargo Bank for holders of loans that are 90 or more days delinquent. Each loan is reviewed on a case by case basis and borrowers will be contacted by the bank to discuss their eligibility. A 30 day pause on the foreclosure process will be in effect while a loan workout solution is explored. Interested homeowners should be prepared to provide proof of income as part of the application process.
Wachovia loan modification may include one or more of the following options: reduced interest rate, a longer loan term or an interest only option for a predetermined period of time. Not all loans will qualify for this program-loans excluded include:
Loans in active Bankruptcy Active foreclosure with a sale date less than 30 days away Loans on vacant or investment properties
Fast-Trace Solution for ARM loans: Borrowers with an adjustable rate mortgage that is scheduled to reset to a higher payment may be granted a 5 year freeze on the introductory interest rate to avoid payment shock and possible default. Eligible loans must be:
Originated between 1/01/2005 and 7/31/2007 Have an initial interest rate reset between 1/1/2008 and 7/31/2010 Have an initial fixed rate period of 36 months or less
Wachovia loan modification candidates will be notified by the bank as soon as it is determined that they may be eligible. Homeowners will be asked to submit an application and provide income and expense documentation as well a demonstrate a financial hardship. It is very important for interest borrowers to have a good, general understanding of how to complete the required loan modification forms properly to have a better chance for approval. Even a deserving homeowner may be denied if they do not understand how to meet the lenders requirements for debt ratio, acceptable hardship situation and complete their financial statements correctly. Borrowers who take the time to learn and prepare can increase their opportunity to receive the help they need and deserve.