Distressed home loan modifications have been in the news since the 1990s. They are not new. Loan companies have kept them quiet. There has been very little incentive from lenders to advertise this type of loan relief. Until now.
President Obama did not engineer this modification, he publicized it. He announced incentives for lenders to make them more receptive to negotiations with homeowners. He brought us the possibility that more families can keep their homes with payments they can afford.
With the economy in the worst shape most of us can remember, there are simply too few alternatives for homeowners who have become victims of the economy. When you open the newspaper and find page after page of foreclosures, that means families in trouble!
With the liberal lending practices we’ve seen in the last 10-15 years, many families have ended up with a mortgage they simply can’t afford anymore. With falling home prices, many of these families have mortgages that exceed the value of the property.
Along comes the hardship home loan modification program. Like any other loan, this type of negotiation has very specific documents that must be submitted to the lender along with supporting documentation. There are guidelines that must be met to qualify. These guidelines include difficulty tests!
Demonstrating hardship doesn’t just mean a pay cut. It could mean marital difficulties or a payment adjustment that is unaffordable. It could also mean that you have excessive obligations and cannot meet the current payment. Not that all of these obligations are acceptable, but they should be negotiable.
There are no new closing costs, legal fees, survey fee, appraisal costs or taxes to pay, unlike any other type of new mortgage. These fees have already been paid and are part of the original loan.
Even bad credit is not enough to disqualify you from this. Your creditworthiness is not part of the negotiation. Affordable payment terms for you are.
Even if you are behind on your payments, you may be able to qualify for a loan modification.
If you qualify, the lender may lower the interest rate on the loan, lower the monthly payment amounts, or change some of the other terms of the loan to allow you to keep your home and avoid foreclosure.
Beginning this process will remove your loan from delinquent or delinquent status. If your home is already facing foreclosure or foreclosure, it may be more difficult to get your lender to negotiate. There is no guarantee that the lender will negotiate with you at this stage. There is also no reason not to try. If you are still willing to negotiate and get the loan back up to date, that is to your lender’s advantage.
All lenders work on the same basis. Outstanding loan balances equal money coming in. In the case of a defaulted loan, there are additional costs associated with the loan and no income from it. The foreclosure costs alone should be enough of an incentive for your lender to negotiate.
Do not assume that they will not negotiate at any time. It’s your house, fight to keep it!
Start your research today. He doesn’t become an unwitting victim of the economy without a fight. When his house is put up for sale by the sheriff, the chances of negotiating decrease significantly. Be sure to start your fight as soon as possible to increase your chances of keeping your home.
