subject: Loan Modification - Do it yourself if you want it done right! [print this page] A lot of folk got caught in the real estate bubble. They bought a bigger home than they could afford reassured that they could sell it later at a profit. Some didn't move up in the market, they stayed where they were and refinanced. Hardly anybody thought it would end in recession with people struggling to make their house payments. Next home prices fell making it difficult to sell and have enough money to pay off the outstanding loan. Is there any thing you can do?
There is light at the end of the tunnel. Banks are starting to modify loans. They have constructed guidelines as to what they will and wont do. If you can make your house payments, they wont change your loan terms. The fact you paid more for the house than it is now worth is not a reason for them to modify your loan. Don't forget you asked for the loan and told them you could make the payments.
You have to have a reason for not being able to make the payments. Do you get paid less than when you took the loan? Why? Did a temporary illness cause you to fall behind? Any one of these reasons would be acceptable to the bank to reduce your payments.
There are lots of acceptable reasons if you know how to present them. Some reasons may not make sense to you but your banker will consider them. These are the reasons why you must absorb all the knowledge you can about loan modifications.
Often banks will temporarily lower the payments if it looks like you'll be able to be timely on your payments. They will often just make a permanent reduction to save time.
You will be bargaining with the largest asset you own. The majority of homes in the US are worth a quarter million dollars or more. Make sure you don't make a mistake.
There are classes you can take on the Internet that teach loan modifications. Don't forget, the more you know about loan modifications the better your chances of saving your home. If you go in not knowing what you are doing, the chances are you will lose your home.
Loan Modification - Do it yourself if you want it done right!
