Loan Modifications: Helping Those with Upside Down Mortgages

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It seems like several years ago when the banks were giving out so many loans, that many thought the economy would keep on booming. As with every other economic boom, there are recessions to follow. In this most recent case, the housing market which once had many houses valued at well over a million dollars, crashed, and left individuals with huge mortgages and homes that were now valued at much less then what was even remaining on their loan. This is what we know as an upside down mortgage and millions of people across the United States are facing this same situation today.

While there have already been too many foreclosures on these homes across the country, lenders along with the homeowners are trying to prevent more from happening through using loan modifications. Loss mitigation officials are working with the borrowers to create new loan agreement that would allow the individuals to afford the monthly payment and starting working on building the equity back up on their home.

These loan modifications include a number of different aspects which rely on how flexible the lender is and how well the borrower can negotiate. Loan modification experts and attorneys assist individuals in their negotiations to obtain a better loan modification. There is normally a reduction of monthly payment caused by a lengthening of amortization which is the length of time making the payments. There may also be a reduction of interest rate as well. For those who want to put more effort into negotiations or who have hired help, receiving a reduction of principle is also very possible.

For any loan modification program there is normally a trial period that the homeowner has to pass through first. This means that that the new type of payment is scheduled for between three to six months according to the policy and agreement and if the payments are made each time on time then the homeowner is accepted into the permanent agreement. Even during the trial period, many borrowers see relief because the foreclosure has been delayed and so have the payments until the modification is put into place. This often gives enough time for borrowers to put some money behind them and prepare to make the permanent schedule of payments.

So far, loan modifications have saves hundreds of thousands of homes from being foreclosed upon by the bank. Hundreds of thousands more are waiting for a response to their application so that they can start on their journey to rebuilding the equity on their home. A loan modification is a solution to unaffordable mortgage debt that can’t be compared to any other solution and the more people realize this, the more homes that will be saved from foreclosure and the faster the housing market will start to reach healthy levels once again. This cycle is essential to the health and growth of the economy and for all of the individuals involved in it. For any homeowners that are facing the situation of losing their home because of an upside down mortgage or mortgage payments that they can’t afford, they are urged to inquire about obtaining a loan modification from their lender.

 


About the Author :

For more information about commercial loan modification, visit the #1 loans modification resource on the net: www.1stforeclosureprevention.com

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