Sunday, April 5, 2009
How does owning multiple properties impact loan modification success?
Loan modifications are uncharted territory and as a result there is no map or guidelines that can guarantee modification success. Because lender policies change daily this poses a number of obstacles for the borrower. However, one obstacle that continues to impede loan modification success is when the borrower owns multiple properties. There are a number of loan modification programs being introduced by the Obama administration, however, they only apply to those borrowers who have one property that they are occupying. According to the lenders borrowers with multiple properties have the resources to earn a rental income or sell the property. Unfortunately, many borrowers are stuck with a mortgage on a rental property that is larger than what they receive in rental income. Sadly to say loan modifications are a rarity for borrowers with multiple properties.
Loan Modification Scam News Site!
It's actually gotten that bad that the Loan Modification News site www.loan-deals.com has actually started a loan modification scam news section!! (I am not kidding)
For more information click here: Loan Modification News Scams
For more information click here: Loan Modification News Scams
Thursday, April 2, 2009
Hardship Loan Modifications
Millions of homeowners are struggling to pay their monthly mortgage payments and risk losing their homes in foreclosure. A bad economy, difficult mortgage loan terms, and decreasing home values have all contributed to this bad situation. The federal government and lenders have stepped in to try to provide solutions. Foreclosure is not only bad for borrowers but lenders as well. The foreclosure process is very costly for lenders and it is hard to recover the amount owed on the loan through a foreclosure auction or short sale. A hardship loan modification may be offered to borrowers who are facing a financial or personal hardship to avoid foreclosure for both the borrower and lender.
A hardship loan modification involves modifying the loan terms to make the payments lower. This is designed to help borrowers facing hardship the ability to still make their monthly mortgage obligations with reduced payments. This can be accomplished through extending the length of the loan, lowering the interest rate, changing the loan from an adjustable rate mortgage (ARM) to a fixed rate mortgage, or in some cases even some principal forgiveness.
A borrower who is seeking a loan modification must demonstrate that they are suffering from a hardship that makes it difficult for them to make their monthly mortgage payments. There are several hardship situations that a lender might find acceptable. Some of these include loss of a job, a reduction in income, divorce or death in the family, military service, a major illness or high medical costs, as well as job relocation. There could be other situations that qualify as well. Each individual borrower's situation is different, and each lender has different criteria that they use to determine hardship cases.
The way a borrower demonstrates their hardship is through writing a hardship letter that is part of the loan modification application. The borrower needs to write a brief but compelling letter that explains their hardship and their willingness to correct their situation. A borrower should be honest and to the point in the letter and provide back up documents if necessary such as divorce papers, copies of medical bills, or any other documents which will bolster their hardship case.
The federal government has responded to these tough economic times and is strongly encouraging lenders to offer loan modificationsto homeowners facing hardship situations. In fact the federal government has recently rolled out the $75 billion Homeowner Affordability and Stability program. Under this program the federal government will actually pay lenders $1000 per loan modification they offer. If you are a struggling homeowner facing a hardship, a loan modification may be just what you need to help get you back on track and save your home from foreclosure.
A hardship loan modification involves modifying the loan terms to make the payments lower. This is designed to help borrowers facing hardship the ability to still make their monthly mortgage obligations with reduced payments. This can be accomplished through extending the length of the loan, lowering the interest rate, changing the loan from an adjustable rate mortgage (ARM) to a fixed rate mortgage, or in some cases even some principal forgiveness.
A borrower who is seeking a loan modification must demonstrate that they are suffering from a hardship that makes it difficult for them to make their monthly mortgage payments. There are several hardship situations that a lender might find acceptable. Some of these include loss of a job, a reduction in income, divorce or death in the family, military service, a major illness or high medical costs, as well as job relocation. There could be other situations that qualify as well. Each individual borrower's situation is different, and each lender has different criteria that they use to determine hardship cases.
The way a borrower demonstrates their hardship is through writing a hardship letter that is part of the loan modification application. The borrower needs to write a brief but compelling letter that explains their hardship and their willingness to correct their situation. A borrower should be honest and to the point in the letter and provide back up documents if necessary such as divorce papers, copies of medical bills, or any other documents which will bolster their hardship case.
The federal government has responded to these tough economic times and is strongly encouraging lenders to offer loan modificationsto homeowners facing hardship situations. In fact the federal government has recently rolled out the $75 billion Homeowner Affordability and Stability program. Under this program the federal government will actually pay lenders $1000 per loan modification they offer. If you are a struggling homeowner facing a hardship, a loan modification may be just what you need to help get you back on track and save your home from foreclosure.
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