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Can My New York Mortgage Note Be Negotiated?

By Tabitha Jean Naylor

If you already hold a mortgage in the State of New York, there may be times when you want to negotiate new terms. For instance, if interest rates drop, or you find yourself in a situation where you cannot keep up with your monthly mortgage payments. In most cases mortgage notes can be negotiated however, some types of mortgage loans are not eligible for modification and others are being sold to investors on Wall Street so your lender may not actually still own your mortgage note at the time you need to re-negotiate terms. This can cause a real headache for the borrower and for the original lender so the first step in determining if your mortgage can be negotiated is to know who owns your mortgage note and if it is eligible for modification through your lender.

If you are thinking about modifying your loan to take advantage of a lower interest rate you should check with your lender to see if they offer a loan modification program. Some lenders can modify the rate of your loan if you are current with payments, and you are willing to pay the fee for a modification, which normally costs around $2,000. The benefit of a loan modification is that it requires no appraisal, or closing costs. In most cases the loan holder must have a credit score of 680 or higher and be current on all payments. Not all lenders offer this service and in most cases, if the lender is a bank you must also be a customer of the bank to take advantage of this service. This type of modification is especially helpful for borrower's that are struggling to make their monthly mortgage payments but are not yet behind. It is a way to restructure the loan to lower monthly payments and to avoid the home falling into foreclosure.

If government agencies, Freddie Mac, or Fannie Mae service your home loan, the lender must participate in the "Making Homes Affordable" loan modification program. The benefits under the "Making Homes Affordable" program are that your lender must accept and process your loan modification application within 30 day and if you are denied, the denial under this program is not permanent. If the lender refuses to modify your home loan you can submit a new application.

Even if you continue to be turned down for a loan modification it can be useful to resort to an old but simple method-write directly to your bank executives and explain your situation. A personal appeal may help you obtain the modifications and new loan terms you need to successfully stay in your home. With the large numbers of foreclosures many banks would rather work with lenders directly to avoid the high costs and losses from the foreclosure process.

Negotiating your mortgage note rate can save you from losing your property but the process can become complicated so it is important to begin the process as early as possible. For others who simply want to take advantage of lower rates the process should be started once interest rates have begun to fall so that you can take advantage of the best possible rates.

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