Understanding the Loan Modification Program

By Keith Ronson

Times are hard and many people need to refinance their homes because they are having problems keeping up with the payments and may even be facing foreclosure. Fortunately, now there is help available through a loan modification program. These programs are designed for borrowers who are already in default 30 days or more and for those who are not able to get refinanced because of a lowered house value or because they are self employed.

The state of the economy has hit hard and in the process has taken businesses and jobs with it. Home values have fallen, paychecks don't go as far, and all of this has lead to homeowners not being able to pay their mortgages. As a result, many are now facing foreclosure.

Many homeowners owe more money on their home than it is actually worth. To make matters worse, a lot of these people can no longer afford their payments are forced to sell their homes below the appraised value just to get out from under the mortgage.

Some claim that a loan modification is the answer, but this information can be confusing. To make it easier, there are companies that you can consult who can help with the loan modification process. Homeowners can obtain a free consultation from a modification specialist who will be able to determine the modification program that is best for their needs, without all the confusion.

There is a catch to the loan modification program: simply that there can only be one modification during the life of the loan. So it needs to be handled in the right way. For homeowners more than a month behind, quick action is needed in order to complete the modification process.

Essentially, the program gets your mortgage payment, including insurance, interest, taxes, insurance and association fees, reduced to no more than 31 percent of your gross monthly income. This is accomplished by adjusting the mortgage interest rate, the loan term and principal amount, in collaboration with your lender.

With interest rates as low as 2% per year and terms as long as 40 years, principal reductions come by a delay in a portion of the principal or by forgiveness of part of it. But the reduced principal amount cannot be lower than the value of the home.

Though lenders are encouraged to work with modification companies to adjust the loans, they are not required to do so. To increase lender participation, the government gives a lender incentive of $1,000 per year for up to 3 years if the borrowers remain in the program. Borrowers can also earn $1,000 per year in principal reduction for up to five years if they keep the payments current.

Borrowers currently in foreclosure or bankruptcy may be eligible under this new plan. In fact, those who have been forced to declare bankruptcy may be required by the courts to do a loan modification.

There is fantastic opportunity for eligible borrowers in the loan modification programs. If you are in one of these, then you should seek a consultation with a professional who can help you into the program that is right for you.

About the Author:

You can get help lowering your payments today through the use of a loan modification program. It's as easy as contacting http://www.modification.org/, for more information and assistance.

Loan Modification -Alternative to unaffordable Mortgages Payments

by Bradley Marmer

Foreclosure is the process of regaining a property from a borrower and returning it to the lender due to default of payment on the loan or some other type of hardship. This is generally due to an inability by the borrower to catch up on their payments or otherwise maintain their financial responsibilities. When this type of foreclosure happens, it is easy to see that the home is lost and the borrower has nothing to show for all the money they put into their mortgage aside from lost equity and bad credit. With all of the damage that occurs in the foreclosure, it only makes sense to make as much effort as possible in order to avoid this particular process.

Modifying a loan is simply a change of the terms between the lender and the borrower. By modifying the terms of the loan, the borrower has a better chance to catch up on their bills or to repay the loan. When individuals are in extreme financial difficulties, this can be the only way out of an untenable situation and can keep the borrower from going into foreclosure. A foreclosure is difficult both for the borrower and the lender, as the lender is counting on this money as income, and the borrower is suffering from an inability to meet their bills. Regardless, a foreclosure can cause the lender a significant amount of money in lost revenue. While it is true that the borrower incurs all manner of bad credit and different types of unhappy results, the lender also suffers from the difficulties due to the cutting off of the income stream that was producing on a somewhat regular basis. In the effort to attain a modified loan, it is important to start as early as possible and take advantage of the most reasonable rates that you can get in order to save your home from foreclosure.

By utilizing loss mitigation and loan modification, the idea is to come up with some type of agreement that will keep the homeowner in their home without being foreclosed on and keeping their credit from being damaged. With so much attention being paid to this type of foreclosure, it isn't hard to see that there are many individuals who could benefit from this type of loan modification to stay out of trouble with their lender.

Stopping foreclosure is not as difficult as it may seem, however it does require the help of an outside party in order to ensure that a detailed financial analysis is conducted and that all of the best alternatives are laid out for you to choose from. In the case of those individuals who are unable to make their monthly payments due to skyrocketing costs, tailoring a resolution to meet the financial circumstances and specific criteria can be all that is required for both the homeowner and lender to come out of the foreclosure intact.

If you happen to be behind on any of your mortgage payments, you will want to begin as soon as possible and not waste any time or take any further risks of foreclosure. With so much attention being paid to reducing the monthly payments that you are required to make, it is only common sense to begin sooner rather than later. When mortgage loan modification experts repair the damage done to your mortgage, they study upon your situation and try to understand and alleviate the hardships that have contributed to the difficulties that you currently suffer.

About the Author:

Loan Modification has quickly become an alternative to help stop foreclosure and relieve homeowners of unaffordable mortgage payments. Mortgage Modification may be a great solution for thousands of struggling homeowners who owe more on their mortgage than their home is worth.