Loan Modification Programs -- The Best Way to Stop Foreclosure

Loan Modification Programs -- The Best Way to Stop Foreclosure

Loan Modification Program The Best Antidote for Home Foreclosure

The world economic crisis has sent a lot of households into financial turmoil and more families are struggling to keep their homes and battle their way out from foreclosure. Fortunately, there is still a way to avoid foreclosure by taking advantage of the home loan modification program. A loan modification simply means that your mortgage payment will be restructured to a more affordable payment plan. This will give you a chance to get your payments current and avoid any risk of foreclosure or filing of bankruptcy.

The home loan modification is designed by President Obama to assist distressed homeowners to modify their mortgage loan modification agreement into a more affordable plan through reduced interest rates and a lower monthly payment plan. The loan modification program will help alleviate the high frequency of mortgage delinquency levels and encourage lenders to provide more efficient loss mitigation programs to defaulters and prevent the process of foreclosure. The main objective is to help out 3 to 4 million residents to keep their home and live a less stressful life.

The Home Affordable Modification Program (HAMP) has so far reached out to 3.137 million loan defaulters since November 2009. As of to date, 73% of the total number of trial HAMP applicants were able to avail of the loan modification program. The administration requires the loan servicers to reduce the monthly payments to no more than 38% of the borrowers gross monthly income. The Government would then shell out to lower the payments further to no more than 31%. The administration will also give out $1000 cash incentive to servicers for every successful loan modification and an additional $1000 payout for each year for 3 years as long as the borrower continues making the payment. This incentive program is designed to encourage more participation from loan servicers that will eventually increase the number of loan modification applicants.

The loan modification program is an excellent solution for homeowners who are honestly undergoing financial hardships and are making a great effort to pay the loan. A proof of financial hardship is also one of the requirements to receive any loan modification help. There are other factors that will be considered by the lenders before a mortgage modification is granted. It is therefore important to get a loan modification guide to ensure that you would be eligible for the program.

Indeed the Home affordable Modification Program (HAMP) of President Obamas administration is both a blessing and a boon to struggling homeowners. Americans now have an alternative solution to saving their homes and avoid the risk of foreclosure or filing for bankruptcy. To date, the loan modification program is by far the best antidote for home foreclosure.

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