There seems to be very few people that have not been touched by the economic downturn of the United States economy. The unemployment rate has reached its highest point in decades, leaving many families wondering how they will make their next mortgage payment.
Information is everywhere in the media about available help for homeowners that are faced with foreclosure proceedings. However, nothing seems to be available for the homeowner that is getting close to defaulting on the loan. Does a homeowner have to begin missing payments to receive any help? The answer is no, this homeowner may be able to qualify for an equity loan modification.
First, what is equity loan modification? This is a renegotiation between the lender and the borrower when there is little or no equity in a home. A person can simply refinance when they have a large portion of their principal paid off but this is not the case for most people whose home values have dropped over the past year or two. It may be possible for a person to renegotiate a lower payment through a better interest rate, a longer loan period or even a reduction in the principal. These factors may help a person that is struggling to make their payment.
A homeowner will not have to be in default in order to apply for an equity loan modification. Lenders prefer to be contacted as soon as the homeowner realizes that they be nearing default rather than waiting until they can no longer make the payments. This will ensure that they will continue receiving payments during the negotiation process. Lenders that are still receiving payments are usually more willing to work on modifying the loan. A person that is doing their best to correct a situation prior to it escalating out of control will appear to be more responsible and will be considered less of a risk for defaulting on a modified loan.
There are a wide variety of circumstances that lenders consider to be legitimate reasons to be nearing default. Circumstances such as a job loss or a hospitalization that resulted in huge medical bills are normally considered legitimate reasons. However, some lenders might consider these situations as extenuating circumstances and will expect the homeowner to eventually overcome them. Lenders are not in the habit of tossing out money to anybody that is having a hard time making their mortgage payments. They are offering an equity loan modification if the homeowners seem to be a credible risk.
The federal government has put up $75 billion to encourage the equity loan modification process in hopes of stimulating the failing housing market. This incentive is beneficial to both the homeowner and the lender. Lenders are given a bonus for each loan modification that they successfully process and the struggling homeowner receives monetary help when making timely payments.
Negotiating a mortgage loan modification is not an easy process and most homeowners have difficulty if they undertake this alone. This is an important step for homeowners that are nearing default and it should be taken seriously. It is a good idea for homeowners to enlist the help of an experienced company that can negotiate with the lender of their behalf. These companies are experienced and will probably be able to negotiate a far better deal than a homeowner could by themselves. Homeowners who are going through these kind of financial problems feel much better when they have someone with experience fighting on their behalf.
Information is everywhere in the media about available help for homeowners that are faced with foreclosure proceedings. However, nothing seems to be available for the homeowner that is getting close to defaulting on the loan. Does a homeowner have to begin missing payments to receive any help? The answer is no, this homeowner may be able to qualify for an equity loan modification.
First, what is equity loan modification? This is a renegotiation between the lender and the borrower when there is little or no equity in a home. A person can simply refinance when they have a large portion of their principal paid off but this is not the case for most people whose home values have dropped over the past year or two. It may be possible for a person to renegotiate a lower payment through a better interest rate, a longer loan period or even a reduction in the principal. These factors may help a person that is struggling to make their payment.
A homeowner will not have to be in default in order to apply for an equity loan modification. Lenders prefer to be contacted as soon as the homeowner realizes that they be nearing default rather than waiting until they can no longer make the payments. This will ensure that they will continue receiving payments during the negotiation process. Lenders that are still receiving payments are usually more willing to work on modifying the loan. A person that is doing their best to correct a situation prior to it escalating out of control will appear to be more responsible and will be considered less of a risk for defaulting on a modified loan.
There are a wide variety of circumstances that lenders consider to be legitimate reasons to be nearing default. Circumstances such as a job loss or a hospitalization that resulted in huge medical bills are normally considered legitimate reasons. However, some lenders might consider these situations as extenuating circumstances and will expect the homeowner to eventually overcome them. Lenders are not in the habit of tossing out money to anybody that is having a hard time making their mortgage payments. They are offering an equity loan modification if the homeowners seem to be a credible risk.
The federal government has put up $75 billion to encourage the equity loan modification process in hopes of stimulating the failing housing market. This incentive is beneficial to both the homeowner and the lender. Lenders are given a bonus for each loan modification that they successfully process and the struggling homeowner receives monetary help when making timely payments.
Negotiating a mortgage loan modification is not an easy process and most homeowners have difficulty if they undertake this alone. This is an important step for homeowners that are nearing default and it should be taken seriously. It is a good idea for homeowners to enlist the help of an experienced company that can negotiate with the lender of their behalf. These companies are experienced and will probably be able to negotiate a far better deal than a homeowner could by themselves. Homeowners who are going through these kind of financial problems feel much better when they have someone with experience fighting on their behalf.
About the Author:
Equity Loan Modification has quickly become an alternative to help stop foreclosure and relieve homeowners of unaffordable mortgage payments. For more information and a free consultation,visit http://www.modification.org/ . Get a totally unique version of this article from our article submission service
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