Millions of homeowners face foreclosure every year. With a sluggish economy and ever increasing work layoffs, the situation doesn't seem to be getting any better. Alternatives to foreclosure and bankruptcy have been created to meet these challenging economic times. A loan modification is one alternative to foreclosure that can not only keep financially struggling homeowners in their homes, but reduce the losses of lenders as well. Lenders face high costs during the foreclosure process, and even if the property sells will usually suffer a large loss on the loan. With a loan modification the terms can be changed to make the monthly payment more affordable for the borrower. This is far less expensive for the lender and the borrower stays in their home and makes reduced monthly payments.
In order to avoid foreclosure and stay in your home, you must contact your lender's loss mitigation department and ask for a loan modification application. You need to do this before your financial situation becomes so dire that you are unable to meet even lower monthly payments. Before contacting your lender you should come to a general understanding of how the loan modification process works and learn as much as you can about your lender's loan modification eligibility requirements.
Once you have received your loan modification application you need to fill out all the required forms and attach any supporting proof of income or other documents that your lender requests. Make sure to request a loan modification that fits within the guidelines of your lender's criteria. Also keep in mind that avoiding foreclosure is not only beneficial to you but your lender as well.
When you fill out your loan modification application forms, you need to build a convincing case that you are a good candidate for a loan modification. You will need to demonstrate that you are facing financial hardship with a well written, concise hardship letter, and also provide evidence in the form of a financial statement that you have the means to meet lower monthly mortgage payments under a loan modification agreement.
Taking the time to become familiar with the loan modification process and submitting a thorough and compelling loan application is well worth it. Your efforts can help you avoid foreclosure and allow you to stay in your home while at the same time rebuilding your finances. Learn all you can about the loan modification process to see if it is right for your situation. Foreclosure is not your only option.
Tuesday, February 24, 2009
Sunday, February 22, 2009
Will a Loan Modification Affect My Credit Score?
A loan modification is not like refinancing. Refinancing requires to you obtain an another loan with new terms, where as a loan modification re-writes the terms of the original loan. Your credit score is not used to determine whether or not you qualify for a loan modification. In addition, a loan modification may work to improves ones credit score if it prevents them from foreclosing on their home. A loan modification is the most logical option if you do not qualify for refinancing, which is a rarity these days, and do not want to lose your home in foreclosure. A loan modification works to reduce monthly mortgage payments so that they are more affordable; this way, home owners can make all their monthly payments on time which is likely to increase their credit score.
Loan Modification Kit From Selfloanmods.com
Loan Modification News By loan-deals.com
Loan Modification Guide by myloanmodguide.com
Loan Modification Kit From Selfloanmods.com
Loan Modification News By loan-deals.com
Loan Modification Guide by myloanmodguide.com
Thursday, February 19, 2009
.How can a loan modification help you? What can be included in a loan modification?
A loan modification is the re-writing of the original loan terms to reduce the monthly mortgage payment and make it more affordable. Nevertheless there are a few stipulations in the loan modification process some of which benefit the borrower and some benefit the lender. According to Mortgagee Letter 2008-21 for loan modifications where the borrower’s principal balance is reduced to the value of the property legal fees and other costs related to the foreclosure process applicable to the current default episode may be added into the modified principal balance.
In other words, your principal balance is reduced to the value of the home, but any costs accrued by the lender during the modification process will be added to the balance. Although this may seem like a downfall for the borrower, it is likely that the costs of the loan modification are much less than the previous balance prior to the modification. A loan modification is not the best option for all homeowners struggling to make their monthly payments, but for those who are committed to staying in their home this is the way to go.
Borrower’s often wonder what will happen to their late charges if the decide to go with the loan modification option. According to Mortgagee Letter 2008-21 lenders are supposed to waive the late charges during the modification process. So, if homeowners are eligible for a loan modification and, are committed to staying in their home than the modification is the way to go.
In other words, your principal balance is reduced to the value of the home, but any costs accrued by the lender during the modification process will be added to the balance. Although this may seem like a downfall for the borrower, it is likely that the costs of the loan modification are much less than the previous balance prior to the modification. A loan modification is not the best option for all homeowners struggling to make their monthly payments, but for those who are committed to staying in their home this is the way to go.
Borrower’s often wonder what will happen to their late charges if the decide to go with the loan modification option. According to Mortgagee Letter 2008-21 lenders are supposed to waive the late charges during the modification process. So, if homeowners are eligible for a loan modification and, are committed to staying in their home than the modification is the way to go.
Monday, February 16, 2009
What is Loan Modification?
A loan modification is not refinancing nor is it debt consolidation. A loan modification is an adjustment of the terms, for which the original loan was set upon, to make monthly payments more affordable for the borrower. For many borrowers the original terms of their loans were appropriate for their monthly budget; they still had disposable income at the end of the month and were not scrapping to get by. The reality is many borrowers have experienced economic hardship in the last year and are in need of some financial relief.
A loan modification changes the terms of the original loan making it more affordable for homeowners to pay on their home and avoid foreclosure. There are a number of ways to modify a loan, for example, changing the interest rate from an adjustable to a lower fixed interest rate. A second way a loan can be modified is extending the period of time the borrower has to pay back the loan, (the amelioration period) extending it from twenty years to thirty or forty years. A third way is to reduce the principal balance of the loan to the value of the homeowner’s property however, this option is rare.
A loan modification is best for all parties involved. To find out how you can do your own loan modification refer to the Basic Guide to Do-it-Yourself Loan Modification. This will provide you with step by step instructions, and will also prepare you for what to expend from lenders.
Also be sure to check out the Loan Modification News site
A loan modification changes the terms of the original loan making it more affordable for homeowners to pay on their home and avoid foreclosure. There are a number of ways to modify a loan, for example, changing the interest rate from an adjustable to a lower fixed interest rate. A second way a loan can be modified is extending the period of time the borrower has to pay back the loan, (the amelioration period) extending it from twenty years to thirty or forty years. A third way is to reduce the principal balance of the loan to the value of the homeowner’s property however, this option is rare.
A loan modification is best for all parties involved. To find out how you can do your own loan modification refer to the Basic Guide to Do-it-Yourself Loan Modification. This will provide you with step by step instructions, and will also prepare you for what to expend from lenders.
Also be sure to check out the Loan Modification News site
Sunday, February 8, 2009
Loan Modification in 2009
Lenders policies are changing daily therefore, it is difficult to determine what qualifies a borrower for a loan modification, and the type of loan modification they will be offered. There are a number of different options a lender can offer such as reducing the monthly interest rate, extending the amortization period, or principal balance reduction.
However the later is rare. Being able to prove an economic hardship continues to be an important component in the loan modification qualification process. Divorce, the death of a spouse, job loss, and a decrease in working hours are all considered valid hardships. Being able to provide documentation of these loan modification hardships is necessary. In addition, banks want to see that borrowers are cutting bank on other soft expenses.
What are soft expenses? They are expenses that are adjustable such as food, utilities, cable, phone and miscellaneous items. Lenders are less inclined to do a loan modification for borrowers that are still spending excessively. Banks want to see that you will be able to afford monthly payments if they qualify you for a loan modification. Good faith money, also called earnest monies, is the money that you should have available to pay toward your loan once a modification has been approved. It can be quite tricky to demonstrate economic hardship and yet, still have good faith money. This is where the debt to income ratio comes into play. Ones income should suffice to pay the monthly mortgage payments, hard expenses and reduced soft expenses, while still having some disposable income. Your Basic Guide to Do-it-Yourself Loan Modification kit can assist you in gathering all the necessary documents, and putting together a loan modification package to present to your bank. It is difficult to go through this process alone and now you do not have to. Rely on this manual to guide you through the process and you will be successful.
Be sure to check out the Loan Modification News site!
However the later is rare. Being able to prove an economic hardship continues to be an important component in the loan modification qualification process. Divorce, the death of a spouse, job loss, and a decrease in working hours are all considered valid hardships. Being able to provide documentation of these loan modification hardships is necessary. In addition, banks want to see that borrowers are cutting bank on other soft expenses.
What are soft expenses? They are expenses that are adjustable such as food, utilities, cable, phone and miscellaneous items. Lenders are less inclined to do a loan modification for borrowers that are still spending excessively. Banks want to see that you will be able to afford monthly payments if they qualify you for a loan modification. Good faith money, also called earnest monies, is the money that you should have available to pay toward your loan once a modification has been approved. It can be quite tricky to demonstrate economic hardship and yet, still have good faith money. This is where the debt to income ratio comes into play. Ones income should suffice to pay the monthly mortgage payments, hard expenses and reduced soft expenses, while still having some disposable income. Your Basic Guide to Do-it-Yourself Loan Modification kit can assist you in gathering all the necessary documents, and putting together a loan modification package to present to your bank. It is difficult to go through this process alone and now you do not have to. Rely on this manual to guide you through the process and you will be successful.
Be sure to check out the Loan Modification News site!
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