A recent visitor found our site by asking the question, “How late can you be to do a loan modification?” It seems like a good topic to discuss as more and more people are falling behind on their loans and not realizing that there is still time to get things fixed.

The quick answer to the question is that it doesn’t really matter. You can be 30 days, 60 days, even 90 days late on your mortgage and there’s still time to get a loan modification. Too often, someone gets behind and thinks they are completely out of options. It doesn’t help that there are companies telling these people to simply walk away as if nothing can be done.

What you can do

Get ahold of a loss mitigation consultant immediately. An experienced mitigator can get a lender to listen up and begin negotiating immediately, no matter how late you are.

Obviously, we prefer that you come to us as early as possible. For every day that goes by, our ability to successfully negotiate your loan modification declines. If you’re 60 days late, don’t wait for day 61.

One of the questions we frequently get asked is “How long will it take for me to get my loan modified?” While there is no one answer that is universally true, there is a general timeline that can be followed. Let’s look at the process step-by-step.

1. Securing help. The first thing you need to do is entirely in your own hands. You need to pick up the phone or submit an application online and get someone working on your behalf. There’s no time constraint on this other than you taking a moment to initiate the process.

Time it Takes: Immediately, but it’s up to you

2. Getting a full loan modification package submitted. We have a set of forms you can access once you speak with an AMG loss mitigation specialist. These must be filled out and returned to us in a timely manner. We’ll help you anywhere you need it, but it’s largely up to you to make sure this gets done quickly. The most frustrating aspect of loss mitigation for us is when a borrower that we know we can help drags his or her feet on getting the information to us. Time is not on anyone’s side and any delays can end up costing you a successful loan modification.

Time it Takes: 1- 2 days if you are proactive about getting everything done quickly.

3. Internal auditing and underwriting of the file. Once your complete package is in, we will do an internal review to make sure everything is in and documented. We will not submit your package unless our mitigators are confident we have built a solid case.

Time it Takes: 24 hours

4. Submit file to be assigned to a mitigation specialist with your lender. Following our internal review, the package is submitted to your lender for assignment with one of their loss mitigation specialists. Depending on the lender, this can take up to a couple weeks so be prepared to for a waiting period.

Time it Takes: 3-14 days depending on the lender

5. Mitigation process and getting a decision back. This is widely variable. Depending on your lender, you may receive a decision within less than a month or it could take up to 60 days. The lenders that are properly staffed will deal with your loan modification request in a timely manner, while those that can’t handle the volume of requests will take longer.

Note: One of the biggest mistakes people make is trying to deal directly with their lender. We hear stories from people about trying for 3-4 months to get a decision and nothing ever happens. It doesn’t need to take that long and if it does, you need representation. Many lenders treat us differently than they do a borrower. The reason is that they know we are going to give them exactly what is needed and they can trust us to only bring clients that are solid candidates for a loan modification. A lender knows up front when they deal with us that they will spend less time working the account.

Time it Takes: Typically 30 - 60 days, but it depends on the lender and can take longer or shorter than the typical time.

6. Making the newly modified loan official. Once the decision is returned from the lender, you’ll have a clear set of new terms that you can either choose to accept or decline. Typically, the lender will give you your new rate, balance, monthly payment and date that the loan will be completed. Additionally, they give you a date you must sign and return the agreement by. If you fail to return the agreement on time, it may cancel your right to a loan modification so do not delay.

Time it Takes: 1-7 days depending on how quickly you return your signed agreement.