Stop Foreclosure by Getting a Same-Day Home Loan Modification: Here’s How and Where
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Documents to Prepare to Bring with You to a NACA “Stop Foreclosure” Workshop
All this week here we will be discussing how to stop foreclosure with the help of NACA, The Neighborhood Assistance Corporation of America (“NACA”). In yesterday’s post, we gave an overview of what to expect when you attend a NACA workshop.
Today, we’re going to go over the paperwork you need to bring to the workshop, and what you have to do with it.
Stop Foreclosure: Documents You Need to Bring with You to a NACA Workshop
On this page of NACA’s website, you’ll find a list of the documents you need to bring with you if you want to get a same-day home loan modification. You don’t have to bring anything with you, but if want to get help immediately, it’s so worth it.
As we stated in yesterday’s post, it’s going to be an all-day thing – anywhere from 8-12 hours. You have to wait in line and attend orientations anyway to get the information you need, so why not be ready – then and there – to apply for a home loan modification.
Post Continued Below . . .
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Documents You Can Print from the Web
Following are links to the documents they ask for that you can print from the web.
4506 Form: This is a Request for Transcript of Tax Return form. This allows NACA to request a copy of your tax return from the IRS. One page.
RMA Form: Request for Modification Affidavit. This is a government (Fannie Mae). About 90% of the home loans in the U.S. are with Fannie Mae / Freddie Mac. So when you request a home loan modification, you’re probably going to be dealing with them (via your lender) in some way. Three pages.
Dodd-Frank Form: This form is just one page that you sign (print last page of this doc only). By signing it, you certifying that you haven’t been convicted of any crime related to a mortgage or real estate transaction in the last 10 years.
This legislation was signed into law by President Obama in direct response to a lot of the mortgage and financial fraud that led to the current housing crisis. Learn more about the Dodd-Frank Act.
Credit Bureau Authorization Form: Allows NACA to pull your credit report. Don’t worry, getting help from NACA has nothing to do with your credit. The reason they pull your credit report is to see if you own more than one home. In order to get home loan modification help from NACA, your home must be your primary residence and you must live there. So, if you have other properties, you don’t qualify.
All of the other documents you’re required to bring are stuff you should have (eg, proof of homeowners insurance, bank statements, W2’s, etc.) and/or create yourself (eg, a hardship letter).
What You Will be Doing with Your Paperwork During the NACA Workshop
Don’t think that you can fudge numbers (especially if you’re self-employed) with NACA. You can’t. Why? Because they require proof of EVERYTHING in the form of printed bank statements, copies of check stubs, etc.
If you can’t verify it, it doesn’t exist. So, just know that going in. And once you complete your paperwork, you can’t go back and change numbers, “for obvious, ethical reasons,” as they put it. So be sure your figures are exact.
Want to Get a Home Loan Modification via NACA? Here’s the #1 Thing You Need to DO
Here, we’ll talk about the paperwork for self-employed individuals, because if you’re a W2 employee, then it’s relatively easy to verify your income. But, if you’re self-employed, it can get a bit more sticky, which is why you are required to bring 6 months’ worth of bank statements. Yes, six months’ worth.
In order to help NACA get you a home loan modification, you’re going to have to prove everything. No more “liar’s loans,” and fudged P&L statements.
This is why you must, for example, print every page of your bank statements, even if it has no numbers on it. So, when you go to print out your documents (eg, your bank statements), if it says Page 1 of 6 on the first page of your monthly statement, you’d better have all 6 pages, even if that last page is only bank legal mumbo jumbo.
And, print out all pages of ALL of your bank accounts. It doesn’t matter if your finances are co-mingled (eg, you use your personal account for some business expenses). The NACA rep will tell you what to do, which is basically go through each page and mark it up.
You’ll be instructed to put a “D” besides those deposits that were for your BUSINESS, and an “E” besides BUSINESS expenses. Certain types of transactions won’t count. For example, if you transfer funds from one bank account to another, those won’t count. Why? Because they could be for anything. But if you deposit money from say, a PayPal account into your bank account, or a check for a job you did, then that does count.
What you’re in essence doing is creating a profit and loss statement (P&L) on the spot. And as I said, you can’t play fast and loose with the numbers with this organization, so just know that going in.
Once you’ve added up all of your deposits and expenses, you’ll then transfer those numbers to a worksheet, and then subtract expenses from deposits. This will then show what you have left over after in income.
The NACA rep will then verify your numbers (yes, they look at your bank statements and double check your math (twice).
How long all of this takes depends on you, ie, how long it takes you to go through your bank statements, and “work your numbers.”
After a rep checks your numbers, you eventually get in front of a counselor who will scan your documents, entering all of your info into a database. At this juncture, you’ll be asked about your expenses (eg, car payment, electric, cable, etc.). The rep will then look through the numbers you gave earlier in essence your P&L statement earlier, add up your expenses and run the numbers to determine what your new mortgage payment should be.
You then take this paperwork and present it to your lender/servicer (if they’re at the event). And they either approve it or not. As you can see, all the work is done right there on the spot – and this is why lenders/servicers can give same-day home loan modifications.
If your lender is not there, all of your paperwork is in NACA’s system. They will forward it to your lender for you. You’re given a NACA ID number so you can access your NACA file online and see when/if your lender responds (they’re supposed to do so within 30 days).
The Importance of Net Income vs. Gross Income When Getting a Home Loan Modification via NACA
Note: One thing NACA does, which should be common sense when applying for a mortgage, is to only consider your NET income, as opposed to gross. After all, gross doesn’t mean a hill of beans because it’s not like paying taxes is “optional.” The only figure that matters is your net – ie, what you bring home each week, right?
So if you’re grossing $500 per week, but only bring home $425 after taxes, that matters a lot when figuring out how much your mortgage payment should be. Most lenders use the 31% of income figure. So at your gross, that would be $620/month mortgage ($2,000 x .31), as opposed to $527 if only net income of $425 is used ($1,700 x .31).
That’s about a $100 per month difference, which makes a big difference if you’re struggling to get by.
Getting a Home Loan Modification via NACA IS Up to You
It’s up to you to be proactive in checking your file – the counselors recommend daily – and getting in touch with your lender if they drag their feet (and to also contact NACA if you need help).
The counselors stress that NACA doesn’t have the man-power to proactively follow up with each homeowner who attends their workshops. So again, it’s up to you contact them if you have questions, contact your lender if they’re not responding, etc.
The process itself is simple – and it is – it’s the waiting that takes so long. Remember, usually a few thousand homeowners who need help stopping foreclosure show up at NACA “Save the Dream” tours (see this link for a list of cities where NACA will be).
In tomorrow’s post, we’ll discuss in detail what to do after you attend a NACA workshop to help stop foreclosure.
Get Answers to Your Home Loan Modification Questions
Have a Home Loan Modification Question? Have a Question About NACA? Send it to us. We’ll get you the answers you need.
Related Posts
Home Loan Help: Documents Needed to Apply for a Mortgage Modification with HSBC (and Other Lenders)
Home Loan Modification Help: Lenders Call It “Dual Tracking”; Homeowners Call It “Double Crossing”
Mortgage Loan Modification: Top 10 Questions About (Home) Loan Modifications
Stopping Foreclosure: Loan Modification Program That Helps Struggling Homeowners
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P.P.S.: Like this post? Follow Foreclosure Business News on Twitter. Copyright © 2012 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.
I really believe that a foreclosures can have a important effect on the debtor’s life. House foreclosures can have a 6 to 10 years negative influence on a debtor’s credit report. A borrower who has applied for a mortgage or just about any loans for example, knows that the worse credit rating will be, the more hard it is to secure a decent mortgage. In addition, it may affect any borrower’s chance to find a reasonable place to let or rent, if that results in being the alternative housing solution. Interesting blog post.
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