Loan Modification: What is it and Can This Save Your Home and Avoid Foreclosure

Loan Modification: What is it and Can This Save Your Home and Avoid Foreclosure

Are youfacing foreclosure? Has the market value of your home decreased and you're now upside down? These may be good opportunities to do a loan modification on your mortgage. A "loan mod" as it is sometimes called, is the process of changing the terms of your original mortgage with approval from the lender, and with new laws from the federal government, is not credit based. Loosing your job, going from a two income family to a one income family (due to divorce or death of a spouse), having increased payments due toan adjustable rate mortgage (ARM), or being upside down due to the decreased market value of your home; these are examples of permanent changes in your finances and may qualify you for a loan modification.

A loan mod may reduce interest rate, reduce monthly payments, modify the length of the loan, or reduce the amount of the mortgage, and many times will include any arrearage placed at the back of your loan. The process starts by you, the homeowner, calling the lender and requesting to do a loan modification.

You'd want to modify your loan if you are behind, or about to become behind on your mortgage, or are upside down, owing more than the current market value of your home, and you want to keep your home. Your credit could be horrible. President Obama's Making Homes Affordable Program guarantees homeowners, regardless of their situation, interest rates of as low as 2%, regardless of your credit.

Generally speaking, the lender would rather modify your loan than foreclose on it and loose money. That said, however, be assured, if you don't make your payments, the lender is forced to proceed with foreclosure. A loan mod is one way to help both, you, and the lender, from going down that dark and dreary road of foreclosure. Also, remember, the lender doesn't have to do a loan modification, and if you don't meet their terms in the re-writing process, your loan modification can be denied. A friend of mine did a loan modification and was denied because he stated he had moved out of the home and was living in another state. For that reason, he was denied. Different lenders have different conditions. For help or information on getting a loan modification today go to http://www.fastfreeloanmods.com

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