Mortgage Loan Mod: Prevent Home Loss By Lowering Your Payment
Mortgage Loan Mod: Tips For Getting One
A growing number of foreclosures is having a disastrous effect on attempts to negotiate an economic recovery. Homeowners who have already lost homes number in the hundreds of thousands, with many others in fear of home loss. For those who are in the foreclosure process, there are some things that you can do to help yourself. Here is some information about getting a mortgage loan mod.
What is a mortgage loan modification?
The first thing to note about a loan modification is that it is not the same as refinancing your home. When a mortgage loan is secured, there are usually only three variables in the terms: the interest rate, the principal, the term of the loan. It does not require appraisal of the home, lengthy credit checks and qualifying documents as would be the case with a refinance.
As recently as two to three years ago, many banks and lending companies were making risky, upside-down loans that homeowners could not afford. The loans were too large, may have had variable interest rates and were spread over thirty or more years. A modification of a loan adjusts one or more of these factors so make the monthly mortgage payments affordable to the homeowner.
What are the Requirements to Qualify for a Loan Mod?
A real hardship situation is the first requirement to apply for a loan mod. This may be due to loss of wage earner income, illness, or death in the household. The loss of income for whatever reason may have made it impossible to meet mortgage payments at their current level.
The mortgage payment amount each month must be at least thirty percent of the total income, but not more than fifty percent in most instances. In some instances, higher percentages are accepted. The original mortgage must be at least nine months old and you must prove that you can manage the lower payments for the foreseeable future.
Lender Actions
Banks that are part of the Federal Reserve Bank system have been instructed to do everything possible to turn back the rising tide of foreclosures in the United States. The sag in housing prices has affected every other sector of the economy. Although some foreclosed homes are being picked up at bargain basement prices by investors and speculators, the preferred avenue for economic recovery is to modify the terms of the mortgage so that the homeowner can continue to stay in the home.
Don’t Try to Avoid Foreclosure Through Inaction
Embarrassment and inaction are not the way to get a loan modification in process. Economic factors that are nationwide can be blamed for foreclosure woes. Individually you are not to blame, except if you do nothing to solve the problem.
Completing the process for a mortgage loan mod is not complicated, but it must be done correctly, and inaction could cost you your home. You can prepare for a call to your lender by gathering needed documents such as the original mortgage, income statements and projects and a plan for what you can do financially to solve the problem. Make sure you are realistic about projected earnings, or you could find yourself in the same position in a few months.
You can learn more about President Obamas mortgage plan now! You can stop foreclosure using a home loan modification fast and easy, following some simple steps. Click here to get your own unique version of this article with free reprint rights.