What Is a Loan Modification? Can It Help Homeowners in Trouble?

Loan Modification

What is a Loan Modification?

A loan modification is a financial procedure in which the loan’s terms are altered, by lowering the interest rate and lengthening the term of the loan, to allow the homeowner to avoid foreclosure.

The lender has to agree with these terms however, and our specialists are dedicated to working directly with your lender to acquire not only lower monthly payments for you, but allow you to keep your home, and save your credit.

Is Loan Modification right for me?

Yes, if you are one of the countless Americans struggling in today’s financial market with an adjustable rate mortgage and not enough equity in your home to refinance.

A Loan Modification is ideal in this situation, because unlike short-sales or forbearances, loan modifications allow you to both keep your home and quickly begin to make lower monthly payments. Additional, through the loan modification process there are no negative credit or tax consequences, unlike both short-sales and forbearances.

What happens in a Loan Modification Procedure?

We will renegotiate with your lender to come up with new terms for your loan, along with a monthly payment amount which you can actually afford!

What do you need from me to start my loan modification?

To get started on your loan modification our specialists will need just some basic financial data, such as your income, home much you owe on how many properties, and how much you can afford to pay per month. We will then contact your lender and demonstrate that you are unable to afford anything higher than this without risking foreclosure, thus allowing us to renegotiate the terms of you loan to get you a new affordable monthly payment amount.

Are the lenders and banks willing to go through the loan modification process?

Yes, absolutely! With the current turmoil in the real estate market lenders realize that they would lose a great deal of money by trying to sell your home on the open market.

The Loan modification actually benefits not only you the homeowner, by gaining lower monthly payments, but the lender as well, allowing them to not have to foreclose on your home and sell the property in a weak real estate market.

Will I have to meet with the Lender or do any Paperwork?

No, absolutely not. We will take care of everything involved in the loan modification process, from all of the paperwork to negotiating directly with the lender on your behalf. Once you retain our we will take care of everything, allowing you to keep your home, and you will never have to directly deal with your lender again.

What other options are available to homeowners who don’t qualify for Loan Modification?

BK7- The bankruptcy that allows you to discharge (much of, if not all) your unsecured debt. If you meet certain income guidelines, you will qualify to discharge your unsecured debt. You may protect equity in your home within limits. Each state has its own limits often based upon your family status. A CH 7 stops a pending foreclosure, but offers no court resolution.

BK13- The bankruptcy that the courts prefer. It provides for a repayment plan for all or a portion of unsecured debt, generally over 3-5 years. It resolves a foreclosure by providing a means of repayment of past due mortgage payments. A CH 13 also provides for a pay back plan on credit cards, and both your income and home equities are greatly considered. However, there are limits to how much you can owe in secured and unsecured debt.

Forbearance- A process in which the lender agrees not to foreclose on the property as long as the borrower agrees to a payment plan which will reduce the total amount owed. Under this process there will still be high monthly payments, however foreclosure will be stayed while you make your payments.

Short Sale- The lender allows the property to be sold for less that the total amount owed on the mortgage. The bank takes a loss through this process. However you will not be able to keep any proceeds from the sale of your home.

Hard Money Loan- A loan based on the equity of your property.

Short Payoffs- Discounting the loan and paying the lender off, while keeping the property. Great for junior liens.

Cash For Keys – Negotiating with the bank to give you cash to move, and avoid needless lengthy negotiation.

Loan Modifications, however are ultimately the best option available to homeowners who can no longer afford to pay their high monthly mortgage payments. A loan modification consists of altering the terms of the loan, by lowering the interest amount and lengthening the term of the loan. In addition your credit report may be upgraded or saved.

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Helpful Information and Resources

In addition to those available on this site, there are other related consumer information resources to help you become educated and make more informed decisions regarding the management of your personal finances:

Credit Debt Management – How You Can Benefit? – These programs can come in many forms and from many different places, but the common thing between them all is the benefits they provide to those who take advantage.

Top 5 Facts to Right Choice for Fix Your Credit – Top 5 Facts to Right Choice for Fix Your Credit and its help you in enhance your credit when you select the right credit repair companies.

How to avoid bankruptcy with credit card debt settlement? – If you are facing financial challenges and looking for the solution for that then read tips For avoid bankruptcy with credit card debt settlement.

How Can I Get My Credit Reports Online? – Getting your credit reports online could not be much simpler. Simply decide which credit bureaus you want your credit reports from.