Adjustable mortgage loans (ARMs) were very popular several years ago during the housing boom because they provided the borrower with low payments. Many of these mortgages were also sub prime mortgages, so they were easy to qualify for. The idea was that a borrower could always refinance later if interest rates rose by taking advantage of the equity they had built up in the home. However, the housing boom also saw an increase in construction and there became a glut of housing on the market. Property values started to drop and many borrowers with ARMs found themselves in the situation of owing more on their home loans than the value of the house.
The sub prime market began to fall apart and credit tightened. This left many borrowers unable to refinance their mortgages and with interest rates that were resetting at higher interest rates. Many borrowers could not afford the higher payments and foreclosures soared at an alarming rate.
Lenders and the federal government have responded to this crisis and loan modifications are now an option for many holding an adjustable rate mortgage. A loan modification changes the terms of the loan so that the monthly payments are more affordable. This can be accomplished through lowering the interest rate, lengthening the payment term on the loan, partial principal forgiveness or changing a loan from an ARM to a fixed rate mortgage.
The federal government is encouraging lenders to offer loan modifications, particularly ARM mortgage loan modifications. The new Homeowner Affordability and Stability program even gives lenders a $1000 per loan modification to provide incentives for lenders to help troubled borrowers to help stabilize the mortgage industry and financial markets.
If you are a homeowner with an ARM mortgage loan struggling to meet your monthly payments, you may qualify for a loan modification. You can check with your lender to see what the eligibility requirements are and what the application process is. You may be eligible to change your loan from an adjustable rate mortgage to a fixed rate. You may also be eligible for an interest rate reduction or even some principal forgiveness if you are upside down (owe more on your loan than the value of your house) on your loan. Before submitting a loan modification application, make sure you become familiar with the loan modification process and your lender's requirements. A loan modification can help save your home from foreclosure and save you thousands of dollars on your mortgage so it is definitely something to consider if you are struggling to meet your monthly mortgage payments.
Wednesday, March 25, 2009
Sunday, March 22, 2009
3 Benefits Of A Loan Modification
3 Benefits Of A Loan Modification
Millions of homeowners these days are struggling to meet their monthly mortgage payments. There are several factors contributing to this including unrealistic or questionable loans being made, a bad economy, people facing high medical costs, massive job layoffs, homes losing their value, and interest rates resetting on adjustable rate mortgages (ARM). Foreclosures have skyrocketed as a result and millions more homeowners are in danger of losing their homes.
To combat the massive wave of foreclosures one solution that has been offered is loan modifications. A loan modification changes the terms on a loan to make the monthly payments more affordable. This can be accomplished through lowering the interest rate on the loan, extending the payment schedule to the loan, forgiving part of the principal on the loan, or changing the type of loan from adjustable rate mortgage (ARM) to a fixed rate mortgage. The goal of a loan modification is to avoid foreclosure, which is beneficial to both the borrower and lender. Here are three major benefits of a loan modification.
Loan Modification Benefit #1: Stop Foreclosure
Foreclosure means the borrower loses their home and the lender must try to auction the home off to recoup their loss. Foreclosure is quite devastating to the homeowner, but the lender also loses in a foreclosure. There are high costs for the lender associated with a foreclosure and it is difficult for the lender to recoup the loan amount owed on the loan through auctioning the home off. Therefore, lenders are motivated to avoid foreclosure and may be wiling to offer a loan modification to borrowers who make certain criteria. The major goal of a loan modification is to avoid foreclosure and keep the homeowner in their house by making the monthly mortgage payment more affordable.
Loan Modification Benefit #2: Lower Monthly Payments
A loan modification will result in lower monthly payments for the borrower. This will not only help the borrower avoid foreclosure but should help the homeowner get back on track with their finances. If their housing payment is more affordable there is less chances of falling behind and incurring late fees and other penalties. Setting a realistic budget for monthly expenses should help the homeowner recover from their financial hardship.
Loan Modification Benefit #3: Improve Credit Score
A foreclosure on one's credit history can have a severe impact on one's credit score and ability to borrow. Credit scores can drop as much as 200 to 300 points with a foreclosure and it could take as many as 5 years before the borrower will be able to qualify to buy another home. A loan modification will help the homeowner avoid foreclosure and they will become current on their mortgage payments. This should help improve the homeowner's credit score. The lower monthly payments should also help the homeowner get back on track on other bills.
A loan modification offers several important benefits for the homeowner facing financial hardship. If you are struggling to meet your monthly mortgage payments, you should definitely consider applying for a loan modification with your lender.
Millions of homeowners these days are struggling to meet their monthly mortgage payments. There are several factors contributing to this including unrealistic or questionable loans being made, a bad economy, people facing high medical costs, massive job layoffs, homes losing their value, and interest rates resetting on adjustable rate mortgages (ARM). Foreclosures have skyrocketed as a result and millions more homeowners are in danger of losing their homes.
To combat the massive wave of foreclosures one solution that has been offered is loan modifications. A loan modification changes the terms on a loan to make the monthly payments more affordable. This can be accomplished through lowering the interest rate on the loan, extending the payment schedule to the loan, forgiving part of the principal on the loan, or changing the type of loan from adjustable rate mortgage (ARM) to a fixed rate mortgage. The goal of a loan modification is to avoid foreclosure, which is beneficial to both the borrower and lender. Here are three major benefits of a loan modification.
Loan Modification Benefit #1: Stop Foreclosure
Foreclosure means the borrower loses their home and the lender must try to auction the home off to recoup their loss. Foreclosure is quite devastating to the homeowner, but the lender also loses in a foreclosure. There are high costs for the lender associated with a foreclosure and it is difficult for the lender to recoup the loan amount owed on the loan through auctioning the home off. Therefore, lenders are motivated to avoid foreclosure and may be wiling to offer a loan modification to borrowers who make certain criteria. The major goal of a loan modification is to avoid foreclosure and keep the homeowner in their house by making the monthly mortgage payment more affordable.
Loan Modification Benefit #2: Lower Monthly Payments
A loan modification will result in lower monthly payments for the borrower. This will not only help the borrower avoid foreclosure but should help the homeowner get back on track with their finances. If their housing payment is more affordable there is less chances of falling behind and incurring late fees and other penalties. Setting a realistic budget for monthly expenses should help the homeowner recover from their financial hardship.
Loan Modification Benefit #3: Improve Credit Score
A foreclosure on one's credit history can have a severe impact on one's credit score and ability to borrow. Credit scores can drop as much as 200 to 300 points with a foreclosure and it could take as many as 5 years before the borrower will be able to qualify to buy another home. A loan modification will help the homeowner avoid foreclosure and they will become current on their mortgage payments. This should help improve the homeowner's credit score. The lower monthly payments should also help the homeowner get back on track on other bills.
A loan modification offers several important benefits for the homeowner facing financial hardship. If you are struggling to meet your monthly mortgage payments, you should definitely consider applying for a loan modification with your lender.
Tuesday, March 17, 2009
Understanding The Loan Modification Process
If you are suffering from a financial hardship and unable to make your current monthly mortgage payments, a loan modification may help you save your house from foreclosure and help you get your finances back on track. Before you apply for a loan modification with your lender you need to understand how the loan modification process works.
First of all, what is a loan modification exactly? A loan modification revises the terms of your loan and results in lower, more affordable monthly payments. This can be accomplished in various ways including lowering the interest rate charged on the loan, lengthening the payment schedule, or forgiveness of mortgage principal.
It is important to understand that foreclosure is not only bad for you the homeowner but your lender as well. Foreclosures are very costly for lenders. Therefore a loan modification can be a way not only for you to save your home but also benefit your lender as well. Keep that in mind when you are in negotiations with your lender.
One of the first things you need to do is find out what your lender's eligibility requirements are for a loan modification. Each lender has different requirements. You need to find out so that you can propose a realistic loan modification request that fits in with your lender's criteria.
There are two important things you will need to demonstrate in order to be approved for a loan modification. You will need to demonstrate that you are suffering from a financial hardship that makes meeting your current mortgage payments extremely difficult. Acceptable financial hardships can include loss of employment, reduced income, divorce, high medical expenses and other similar financial hardships. The second thing you need to demonstrate in order to be eligible for a loan modification is that you will be able to meet lower monthly payments under a loan modification agreement.
Once you have a general understanding of how the loan modification process works, you need to contact your lender's loss mitigation department and request a loan modification application. You then need to complete the application and submit it along with any support documents your lender requests such as pay stubs and income tax returns. Submitting an accurate, complete and compelling loan modification application is critical in getting your loan modification approved. Remember the two things that you need to demonstrate: your hardship and your ability to meet the new lower payments under the loan modification agreement.
Once you have submitted your loan modification agreement you need to follow up with your lender until they give you a decision.
The three basic steps of the loan modification process are doing your upfront research, the application process, and following up with your lender until your loan modification request is approved.
First of all, what is a loan modification exactly? A loan modification revises the terms of your loan and results in lower, more affordable monthly payments. This can be accomplished in various ways including lowering the interest rate charged on the loan, lengthening the payment schedule, or forgiveness of mortgage principal.
It is important to understand that foreclosure is not only bad for you the homeowner but your lender as well. Foreclosures are very costly for lenders. Therefore a loan modification can be a way not only for you to save your home but also benefit your lender as well. Keep that in mind when you are in negotiations with your lender.
One of the first things you need to do is find out what your lender's eligibility requirements are for a loan modification. Each lender has different requirements. You need to find out so that you can propose a realistic loan modification request that fits in with your lender's criteria.
There are two important things you will need to demonstrate in order to be approved for a loan modification. You will need to demonstrate that you are suffering from a financial hardship that makes meeting your current mortgage payments extremely difficult. Acceptable financial hardships can include loss of employment, reduced income, divorce, high medical expenses and other similar financial hardships. The second thing you need to demonstrate in order to be eligible for a loan modification is that you will be able to meet lower monthly payments under a loan modification agreement.
Once you have a general understanding of how the loan modification process works, you need to contact your lender's loss mitigation department and request a loan modification application. You then need to complete the application and submit it along with any support documents your lender requests such as pay stubs and income tax returns. Submitting an accurate, complete and compelling loan modification application is critical in getting your loan modification approved. Remember the two things that you need to demonstrate: your hardship and your ability to meet the new lower payments under the loan modification agreement.
Once you have submitted your loan modification agreement you need to follow up with your lender until they give you a decision.
The three basic steps of the loan modification process are doing your upfront research, the application process, and following up with your lender until your loan modification request is approved.
Monday, March 9, 2009
Loan Modification Help For Struggling Homeowners
Millions of homeowners are struggling to meet their monthly mortgage payments each month. As the economy has deteriorated and job layoffs have increased, the situation has gotten even worse. These struggling homeowners face the prospect of losing their homes to foreclosure and lenders lose out as well. A loan modification is often a viable alternative to foreclosure. Under a loan modification agreement, the terms of a loan are changed to make the monthly payments more affordable. This can be accomplished through lowering the interest rate charged on the loan, extending the payment term, or forgiving part of the principle on the loan. Loan modification help is desperately needed by millions of homeowners.
There are various loan modification programs available to the homeowner depending on who the lender is and what type of loan it is. There are government sponsored loan modification programs such as the Fannie Mae Streamlined Modification Program for loans serviced by Fannie Mae and there is the FHA Partial Claim for loans that are insured by the FHA. Various private lenders also offer loan modification programs. If you are considering a loan modification you need to check with your lender to see what type of loan modifications they have available and also find out what the eligibility requirements are.
Loan modification help can also come in the form of the various loan modification services that are available to help you with your loan modification process. There are loan modification companies and also loan modification attorneys who can work with your lender on your behalf to attempt to get your loan modification approved. However, these services can be expensive so you may want to consider contacting your lender directly and doing your own loan modification.
Loan modification help is desperately needed by millions of homeowners and also lenders and government entities. The federal government is strongly encouraging lenders to offer loan modification assistance in this troubled economy. Before signing up with any loan modification service or attorney, be sure to do upfront research to make sure the company is legitimate and experienced with loan modifications and loss mitigation services. If you decide to request a loan modification on your own, learn everything you can about the loan modification process before submitting your loan modification application. If you are struggling to meet your mortgage payment each month know that you are not alone and that there is help available.
There are various loan modification programs available to the homeowner depending on who the lender is and what type of loan it is. There are government sponsored loan modification programs such as the Fannie Mae Streamlined Modification Program for loans serviced by Fannie Mae and there is the FHA Partial Claim for loans that are insured by the FHA. Various private lenders also offer loan modification programs. If you are considering a loan modification you need to check with your lender to see what type of loan modifications they have available and also find out what the eligibility requirements are.
Loan modification help can also come in the form of the various loan modification services that are available to help you with your loan modification process. There are loan modification companies and also loan modification attorneys who can work with your lender on your behalf to attempt to get your loan modification approved. However, these services can be expensive so you may want to consider contacting your lender directly and doing your own loan modification.
Loan modification help is desperately needed by millions of homeowners and also lenders and government entities. The federal government is strongly encouraging lenders to offer loan modification assistance in this troubled economy. Before signing up with any loan modification service or attorney, be sure to do upfront research to make sure the company is legitimate and experienced with loan modifications and loss mitigation services. If you decide to request a loan modification on your own, learn everything you can about the loan modification process before submitting your loan modification application. If you are struggling to meet your mortgage payment each month know that you are not alone and that there is help available.
Thursday, March 5, 2009
What banks offer loan modifications?
All banks offer loan modifications to their borrowers. Nevertheless, the types of loan modifications vary for each lender. Countrywide Home Loans for example was part of a class action civil law suit, specifically focused on pay option adjustable ARMS loans. As a result of this law suit Countrywide is required to modify 400,000 loans equaling 8.64 billion in foreclosure relief.
Borrower’s that have a pay option adjustable ARM are likely to be qualified for the Nationwide Home Retention program if the loan pertains to their primary and only residence. Countrywide loan modifications vary for each borrower, and there are several options ranging from reducing the principal balance to making the borrower current. The general goal is to reduce the monthly interest rate so the monthly payments are affordable. Other banks like National City are reducing monthly interests rates to as low as 1% for a fixed period of time ranging from 18 months to 5 years, after this point there will be a gradual increase. However, a 1% interest rate for any period of time will allow the borrower to alleviate any financial hardships they are currently experiencing. National City Bank have a particularly proficient loan modification department and are a pleasure to work with.
For more loan modification news be sure to visit www.loan-deals.com.
Borrower’s that have a pay option adjustable ARM are likely to be qualified for the Nationwide Home Retention program if the loan pertains to their primary and only residence. Countrywide loan modifications vary for each borrower, and there are several options ranging from reducing the principal balance to making the borrower current. The general goal is to reduce the monthly interest rate so the monthly payments are affordable. Other banks like National City are reducing monthly interests rates to as low as 1% for a fixed period of time ranging from 18 months to 5 years, after this point there will be a gradual increase. However, a 1% interest rate for any period of time will allow the borrower to alleviate any financial hardships they are currently experiencing. National City Bank have a particularly proficient loan modification department and are a pleasure to work with.
For more loan modification news be sure to visit www.loan-deals.com.
Monday, March 2, 2009
Can't pay your mortgage? Some modification offers hurt more than help
PALM BEACH GARDENS, Fla. (MarketWatch) -- Your lender refuses to grant relief from your costly mortgage, and you're desperate. Should you respond to any of the growing number of television ads, mailings or phone calls touting loan modifications?
The marketers producing the ads represent a broad mix of firms seeking business, including mortgage and real-estate brokers and lawyers.
One ad running on several television stations highlights the "crisis on Main Street" and offers a loan modification "helpline." That ad is produced by JCR Enterprises Inc., a Foothill Ranch, Calif., marketing company.
David Riemann, senior vice president, says that consumers who respond are typically referred to a participating attorney in their area. His company may collect a retainer for processing and handling the call. Plus, JCR gets paid commissions for media and production. He says he has about 50 loan modification clients, mostly attorneys. To handle a loan modification, those attorneys charge consumers fees ranging anywhere from $995 to $5,000.
Click here to read the rest of the article
The marketers producing the ads represent a broad mix of firms seeking business, including mortgage and real-estate brokers and lawyers.
One ad running on several television stations highlights the "crisis on Main Street" and offers a loan modification "helpline." That ad is produced by JCR Enterprises Inc., a Foothill Ranch, Calif., marketing company.
David Riemann, senior vice president, says that consumers who respond are typically referred to a participating attorney in their area. His company may collect a retainer for processing and handling the call. Plus, JCR gets paid commissions for media and production. He says he has about 50 loan modification clients, mostly attorneys. To handle a loan modification, those attorneys charge consumers fees ranging anywhere from $995 to $5,000.
Click here to read the rest of the article
Sunday, March 1, 2009
Do It Yourself Loan Modification Tips
If you are struggling to meet your monthly mortgage payments each month, a loan modification may be just what you need to help you through your financial hardship. A loan modification involves revising the terms of your loan to make your monthly payments more affordable for you. This can include lowering the interest rate you pay, lengthening the payment schedule, or forgiveness of part of the principal. There are many loan modification companies that offer their services to help you with your loan modification. However, these services can be expensive, and when you are struggling financially the last thing you need is another expense. Do it yourself loan modification is possible if you have the right knowledge. Here are a few loan modification tips to help you through the process.
Tip #1 Do It Yourself Loan Modification is possible
Many homeowners have successfully negotiated with their lenders to get a loan modification approved. The key to your success is doing research upfront to understand the loan modification process in general and your lenders' requirements for a loan modification in particular. You can do it yourself if you have the proper knowledge and follow through on what you need to do to get qualified for a loan modification.
Tip #2 Your loan modification application is key in getting your modification approved.
It is very important to fill out your loan modification application accurately and present your case for why you are a good candidate for a loan modification in a convincing and compelling manner. You will need to write a solid hardship letter, prepare a financial statement, and request a loan modification that not only fits within your budget but also within your lender's requirements. Before filling out and submitting your application you need to understand what your lender is looking for and what makes you a good candidate for a loan modification.
Tip #3 Becoming familiar with the loan modification process can be learned in just a few hours.
The most important things you need to learn are finding out what your lender's requirements are and learning how to prepare and submit a solid loan modification application. The two things you need to demonstrate is that (1) you are suffering from a financial hardship that makes meeting your current monthly mortgage payments difficult and (2) that you would be able to make lower monthly payments under the terms of a loan modification agreement. You will demonstrate these two things in your loan modification application.
Take the time to become familiar with the loan modification process and learn how to fill out the application properly. Be persistent in your communication with your lender and you have an excellent chance of being approved for a loan modification.
Dont forget to visit Loan Modification News
Tip #1 Do It Yourself Loan Modification is possible
Many homeowners have successfully negotiated with their lenders to get a loan modification approved. The key to your success is doing research upfront to understand the loan modification process in general and your lenders' requirements for a loan modification in particular. You can do it yourself if you have the proper knowledge and follow through on what you need to do to get qualified for a loan modification.
Tip #2 Your loan modification application is key in getting your modification approved.
It is very important to fill out your loan modification application accurately and present your case for why you are a good candidate for a loan modification in a convincing and compelling manner. You will need to write a solid hardship letter, prepare a financial statement, and request a loan modification that not only fits within your budget but also within your lender's requirements. Before filling out and submitting your application you need to understand what your lender is looking for and what makes you a good candidate for a loan modification.
Tip #3 Becoming familiar with the loan modification process can be learned in just a few hours.
The most important things you need to learn are finding out what your lender's requirements are and learning how to prepare and submit a solid loan modification application. The two things you need to demonstrate is that (1) you are suffering from a financial hardship that makes meeting your current monthly mortgage payments difficult and (2) that you would be able to make lower monthly payments under the terms of a loan modification agreement. You will demonstrate these two things in your loan modification application.
Take the time to become familiar with the loan modification process and learn how to fill out the application properly. Be persistent in your communication with your lender and you have an excellent chance of being approved for a loan modification.
Dont forget to visit Loan Modification News
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