Q: I’d like to modify my loan, but not through my current mortgage lender. Are there other lenders, besides my current lender, that would assist me in a re-modification? My current lender has denied my modification application and I want to go somewhere else to see if I qualify for HAMP. Or, should I forget the whole thing and try to see if I can refinance? Mortgage rates are getting lower.
A: Loan modifications, including those done under the HAMP program, must be done by your existing servicer. The servicer acts on behalf of the owner of the loan, and no other party has any rights to make any changes to your agreement. Loan modifications usually are in order when a borrower cannot meet the terms of the original obligation, either on a temporary or more permanent basis, and especially where there is an imminent risk that the loan might default (missed payments, etc.).
For traditional refinancing, you certainly can look elsewhere than your existing lender. In the case where you are underwater, where the mortgage amount is higher than the value of the home, the Home Affordable Refinance Program (HARP) is your only option, but you meet the program's qualifications. If you do qualify but your lender does not participate in the voluntary program, you are then free to find another lender who will conduct your HARP refinance.
A 25-year expert observer of the mortgage and consumer debt markets, Keith Gumbinger has been cited in thousands of articles covering a wide range of consumer finance and economic topics in outlets ranging from the Wall Street Journal to the Bottom Line newsletters. He has been a featured guest on national broadcasts for CNN, CNBC, ABC, CBS and NBC television networks and has been heard on NPR and other national and local radio programs. Keith is the primary researcher and writer for HSH.com's MarketTrends newsletter and has authored or co-authored a number of consumer guides on mortgages, home equity, refinancing and more.
