subject: Why Choose A Federal Loan Modification? [print this page] Struggling homeowners used to have only two choices: succumb to foreclosure or declare bankruptcy. Needless to say, neither of them really offer any help. Fortunately, todays options are more varied and efficient. One of the most popular solutions is federal loan modification, a program backed by the Federal Housing Administration (FHA). Under the federal loan modification program, one not only gets to keep his home, but also bring the mortgage down to more manageable levels. This article lists some of the benefits of federal loan modification and how you can maximize them.
Stop foreclosure
Even if foreclosure proceedings have already started, loan modification can stop the process while you work to get back on track. Usually, as soon as you get approved, the bank will put the foreclosure on hold and put your loan modification file on top. Think of it as buying some time to get the mortgage current, without resorting to short sales or other drastic measures.
Keep your home
Perhaps one of the best advantages of federal loan modification is that you get to stay in your home. Other options, such as short sales and deed in lieu, only clear up the mortgage but wont save your property. The federal loan modification program is designed exactly to do the opposite: to keep homeowners in their homes not only to tide them over, but until the mortgage is paid off.
Get the terms you want
The federal mortgage loan modification program offers a variety of plans to make your mortgage more comfortable. They can reduce your interest, extend your loan terms, or change your loan structure from an adjustable to a fixed rate. It all depends on your situation and how well you can negotiate with your lender. New program rules also allow principal reduction, wherein part of the amount you owe is actually written off.
Stay protected from scams
Since the federal loan modification is backed by the government, you can be sure your lender follows standards made to protect the borrower. While some banks offer in-house loan modification plans, the federal loan modification program was designed with the borrower in mind, rather than risk and profit. To make sure youre not getting scammed, talk directly to your lender or work with a well-established loan modification firm.
Remember, your home is your biggest investmentand the last thing you want is to lose it with just one wrong decision. Look into federal loan modification as soon as your loan starts to weigh you down. The sooner you act, the faster youll be able to get back on track and save your home.
