subject: Preventing Foreclosure With A Loan Modification [print this page] As the world is trying to get out of it financial mess, the economy continues to languish and jobs are tough to come by. Needless to say, making your bills and mortgage on time are continuing to be an issue for many homeowners.
A lot of new companies are coming out of the woodwork and offering foreclosure prevention solutions such as loan modification, short sales and even short refinances. These are viable options because nobody seems to be safe from the doldrums of the current economy.
It is happening to homeowners who have prime credit so it is not just borrowers who have had risky credit payments it is everybody. Even movie stars and professional sports players are losing their extra homes they bought for speculative or recreational purposes. A foreclosure can be prevented but a homeowner needs to take swift action with the right company or better yet a company with legal connections.
Taking your home back by the bank is one of the legal rights and insurance safety nets a lending institution has to limit their losses. It can also be called a bank repossession, or "bank repo", after three or more payments have not been paid by the homeowner. A majority of the lenders hire an attorney who specializes in real estate to submit the correct documentation in the court so it becomes an official foreclosure process.
Depending on the state and its foreclosure laws, the whole foreclosure process can range from 21 days all the way up to one year. If the homeowner who is behind by 30 days on their mortgage payment the lender generally accepts the payment if it is submitted jointly with the existing payment due, basically two payments are necessary to bring their account current.
However, contrary to what homeowners think, the lender or bank prefers to allow homeowners to get their financial problems back on track and not repossess homes. The department that oversees this is loss mitigation who wants the optimal solution for both the lender and the borrower which is a loan modification.
A loan modification serves the interest of the bank and homeowner. It is a process of altering the terms of their existing mortgage to more favorable terms for the borrower so that the payment is more affordable. Homeowners should accept the opportunity presented to them when it is better than their current situation and looks for different and broader ways to increase their income.
