Loan Modification: Help For Homeowners

June 25, 2009 at 8:34 am · Filed under Uncategorized

Losing your home is not something that you really want to face, but you may be dangerously close if you are unable to keep paying your mortgage payments with the loan terms the way that they are now.  A loan modification can help you keep your home, while ensuring that you can still pay for the home through modifying the terms of the loan.  A loan modification has three main categories.

The first loan modification category involves the lender changing the interest rate terms of the mortgage.  The interest rate will be lowered.  This new rate will varying depending on what the homeowner can afford to pay each month.  The interest rate is one of the factors that can affect the payment amount.  Most interest rate changes are temporary.

The second loan modification category involves a change in the term length of the mortgage loan.  The term length is how long you will be paying on the amount that is borrowed for the home.  The change in the term is usually permanent.  This modification is another factor that can lower the monthly payments of the loan.

The third loan modification category is a change in the principle balance.  This modification changes the amount of principle that you own on the entire mortgage loan.  The lender can choose this loan modification method to take off some of this money that you owe.  In most cases, this method is chosen when the amount that you owe on your mortgage loan is more than what the market value of your home is.

Many loan modification instances will involve the combination of one or all of these three categories.  The lender, or at least a mitigation representative, will try to create a new mortgage loan that will help to make sure that you can afford to make the new monthly payment amounts without causing any further financial trouble.

Most homeowners do not consider a loan modification for past troubles.  For example, let’s say that you got behind on a few payments and have a large amount of penalties and additional fees, and the lender expects you to pay the past due amount in one lump sum.  You can’t afford to do this, but you are able to continue paying your mortgage payments that you have now.  A loan modification can work here.  The lender can choose to completely forgive the fees and penalty charges, and simply add the missed payments to the end of the mortgage loan.  This helps you greatly because you are back on the right track without being considered as a default.

In general, you may find that the whole process is rather lengthy and you may get frustrated.  Keep in mind that you are dealing with the lender directly and as such, you will not have to worry about any further action while you are being considered for a loan modification.  You will still need to make an effort to pay something on your payments every month, which will show a good faith effort on your part.

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What’s new in real estate? Anything good?

May 21, 2009 at 4:34 pm · Filed under Real estate news ·Tagged , ,

Real Estate –Are you missing the good news? As they say, bad news travels fast. This is true for real estate as well. We all are so preoccupied with bad news that we hear daily that we fail to notice the good things that are happening in real estate like lower mortgage rates, record breaking affordability, new tax credits and big jump in sales of real estate market of Florida, California and Nevada What is bad in economy currently?

Well for starters, all of you must have heard the sobering national economic news update that came out yesterday. This has just added insult to injury with the result that confidence of consumer is at all time low. Off course this is a particular bad news for real estate, as consumers are psychologically not ready to invest in real estate. There is job insecurity in the markets. And someone who is insecure about their job would not even think about buying a home. To top it all, there are huge losses at the Wall Street and instability in banks as well. What is positive with so many bad news?

Well, to start with there is housing affordability and there is that option of loan modification. If the ordinary customers can afford to buy a home with their present income with present mortgage rates then this will surely lure customers to towards real estate in large numbers. Many households with a median income can now buy a median-priced house and actually fulfil their dream of having their own home. This fact is observed in local markets throughout the country. This has become possible for first time since National Association of Realtors started “Housing Affordability Index.

“The index saw a jump of 3 points in starting of the year and is at an all-time high position currently. All this is possible because of rising household income along with a continuous decline in prices of household under sale. There is one more trend which has failed to grab media attention. One of the major problems in the way of recovery, according to most economists, is the large amount of unsold houses in the inventory in many local markets. But it has been observed in past couple of months that this baggage of unsold houses is declining, with the start of the year seeing a drop of 3 percent bringing it down to lowest level in past two years. Government move to encourage economy

There is good news for the people who have not bought a house in last three years; Congress has come out with a new $8000 non-repayable tax credit for them. This policy has the potential to pull lots of bystanders to jump into the real estate market for rest of this year. More over, loan modification option is still there!

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Getting loans modified….

May 21, 2009 at 1:05 pm · Filed under Getting to know loan modification better ·Tagged , ,

There was a time when Loan modification did not exist – but not in this day and age. Due to skyrocketing of interest rates and reduction of housing prices, homeowners are scurrying to the nearest loan modification company to save their homes.  Loan modification process allows homeowners to modify their existing loans and solve on hand financial problems.  It is best to apply for a loan modification and seek the help of housing law experts as soon as possible to get the best deal.

Loan modification Consultation
While there are many loan modification companies found on the internet today, it is best to scrutinize each company and read feedbacks about their service.  Contact information like email address and telephone number are posted on their websites – feel free to call them or email them to ask questions about their company.   Choose the best loan modification company that will best suit one’s needs and apply for a free consultation.  Consultations should be free; be wary of companies that ask for initial consultation fees.

Gathering of Financial Documents
After the initial consultation, loan modification specialist would be able to determine if the applicant has qualified.  At this point, applicants would be required to present financial information that would help them in examining the financial situation.  Documents would be: one (1) months proof of income, W2’s, bank statements (at least 4 months), pay stubs or rental agreements;  a hardship letter explaining what made the applicant fall behind on their payments;  banks statements, at least 4 months; most recent mortgage statement; tax returns (form 1040); and monthly expense sheet (food, utilities and mortgage payments).

Loan modification specialist would then review all information and create a negotiation package which will be submitted to the existing lender holding the loan the applicant wish to modify.  A thorough financial investigation and analysis will be conducted before the loan modification company will begin any negotiation.  This process will take more or less 2 months depending on how fast and accurate an applicant can provide them the necessary financial information.

Loan modification negotiations
Negotiations between the existing lender and the loan modification company will begin and continue until a suitable agreement has been reached.  The new loan package should be affordable to the homeowner and acceptable to the lender.   The new loan package agreement will then be presented to the homeowner for approval.

Loan modification approval
After reaching a satisfactory agreement, a final modification document will be sent to the applicant for approval before execution.  It is ideal to have at least two months payments saved before the loan modification approval to ensure a flawless and affordable new payment schedule.

Getting a loan modification is not an overnight thing.  It is a detailed reassessment of financial status.  It can be hard work but loan modification experts can help and guide homeowners for easy, breezy loan modification.

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