Posts Tagged ‘loan modification programs’

I knew we were in trouble but did not want to admit it. Bills were stacked to ceiling and I was running a no-frills household. Foreclosures had hit our neighborhood hard. Even with a second job I was way behind.

A medical emergency, divorce, or job loss might trigger the process. I received my Notice of Default the day I was holding my garage sale. Looking past the treadmill, books, and my lose weight fast program I was struck with reality. I sunk into a chair by my electric breast pump and stared at my strapless wedding gown.

The thought of losing our house was simply not in the cards. I am typical male that does not really listen. I just want to solve the problem. I had no experience in losing a home or more importantly how to avoid losing a home to the bank.

I got proactive. I determined who had my mortgage and contacted them to see what options I had available. Mortgages are bundled together and sold and often resold. You mortgage may now be with a company thousands of miles from the downtown bank that financed your house. FHA loans, Fannie Mae and Freddie Mac loans all have free counselors with toll free numbers.

VA and HUD also have free counselors to determine if you qualify for loan modification programs. You may also fit a special needs category that entitles you to modified loan. Work quickly and do not waste any business days. The clock is ticking on your foreclosure.

You have a specific number of days from the time you default to the day your home will be taken back by the lender. You have several weeks to cure the payments you are in arrears. If you can cure the default you will then resume your regular monthly payments as if nothing ever happened.

The process may vary from state to state. You need to check to determine if you have a one year right of redemption. The time period may be different and it may not apply to your state. Redemption rights should be established.

It is vital that your lender performs a loan modification agreement you can afford. If they cannot and you find no other way to rescue yourself then your home will go to auction. The bank will bid their interest and most likely own it longer than they want. Do not drive by empty houses when you could be finding a way to keep yours full of family.

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Many struggling homeowners could qualify for a loan modification and not even be aware of it. The reason is because despite the fact that a loan modification will, in the long run, benefit both borrowers and lenders, banks still lose money on their original loans. Not surprisingly, lenders will do everything they can to hold their customers to their original terms of the mortgage. There comes a time, however, when it becomes obvious that default and then foreclosure are inevitable. It might become clear at some time that default and foreclosure can’t be avoided. When this time comes it is necessary to consider a loan modification.

This mortgage loan modification checklist to help you maximize your chances of getting qualified.

There are a lot of measures a homeowner can take before foreclosure. Once it becomes obvious that your financial situation is getting tight, contacting your lender or getting on the internet and researching other loan modification services would be a smart idea. There are a lot of federal programs such as Obama’s Home affordable Program that were created to keep struggling homeowners in their homes. Finding some help in your attempt to navigate the process can start with programs like this one.

A loan modification takes your current loan and makes changes to it that will make it possible for you to pay it in a timely fashion. Your payments are decreased by reducing the principal you owe so that it matches the actual value of your home, lowering the interest rate and turning it into a fixed rate, and/or spreading your mortgage out over a longer pay period. Missed payments can either be forgiven or rolled back into your mortgage so that you begin repaying your loan in good standing.

The process is time-consuming and you must satisfy certain qualifications to be approved for a loan modification. At first you must prove true financial hardship. It is more effective if this difficulty comes from factors beyond your control. A death of a paying member or your family, job loss, a bad mortgage, divorce,military deployment and illness are all examples of difficulties that are out of your control. While extreme credit card debt can also be a hardship, unless you can prove that you were using the credit cards as a means to eat and pay bills, this can actually harm you. It is a tightrope walk.

You also must show the lender your commitment to keeping your home and paying down the new loan. They may want you to create a budget. According to the many loan modification rules, your new payment can’t exceed 31% of your gross monthly income. This will help you to come up with a budget that you can live with.

Before you quit and leave your home behind, consider the possibility of a loan modification. A lender would prefer to lose a few thousand dollars on a mortgage than have a foreclosure property to add to their collection. The time is right for you to take the chance and work with your lender. Many homeowners will use mortgage loan modifications to remain homeowners in these tough times.

You can learn more about a loan modification program and download a step-by-step checklist to guide you through the process. Find out about loan modification services.

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