Honest Realestate Agent

Posts Tagged ‘loan modification programs’

Every time we drive to work, school, or church we pass the empty homes. These are the houses our friends lived in and now they were largely unkempt and vacant. The stories behind each of the foreclosures was different but the anguish at saying goodbye was identical.

A medical emergency, divorce, or job loss might trigger the process. I received my Notice of Default the day I was holding my garage sale. Looking past the treadmill, books, and my lose weight fast program I was struck with reality. I sunk into a chair by my wife’s electric breast pump and stared at her strapless wedding gown.

The thought of losing our house was simply not in the cards. I am typical male that does not really listen. I just want to solve the problem. I had no experience in losing a home or more importantly how to avoid losing a home to the bank.

I got proactive. I determined who had my mortgage and contacted them to see what options I had available. Mortgages are bundled together and sold and often resold. You mortgage may now be with a company thousands of miles from the downtown bank that financed your house. FHA loans, Fannie Mae and Freddie Mac loans all have free counselors with toll free numbers.

VA and HUD also have free counselors to determine if you qualify for loan modification programs. You may also fit a special needs category that entitles you to modified loan. Work quickly and do not waste any business days. The clock is ticking on your foreclosure.

Check out your state’s foreclosure rules. Ask about your redemption rights. No matter who you speak to or how informed they may be, make sure your speak to an experienced real estate attorney to confirm everything. You must know how many days you have to catch up on your back payments. You need to know if your auction date can be extended.

The process may vary from state to state. You need to check to determine if you have a one year right of redemption. The time period may be different and it may not apply to your state. Redemption rights should be established.

What if you cannot bail yourself out or find a solution in partnership with your lender? Your home will be scheduled for auction. Do not wait until you are standing in the middle of your garage sale holding your default notice to find a solution. Start the minute you even think you may not be able to make your monthly mortgage payment.

Most struggling homeowners could qualify for a loan modification and not even be aware of it. This is because despite the fact that a loan modification will, in the long run, help both borrowers and banks, banks still lose money on their original loans. Obviously, banks will do all they can to hold their customers to their original terms of the loan. Eventually, however, when it becomes clear that default and then foreclosure are imminent. It might become obvious at some time that default and foreclosure can’t be avoided. When this point is reached it is necessary to apply for a loan modification.

Download this loan modification checklist to help you better your chances of getting qualified.

There are numerous measures a homeowner can take before foreclosure. As soon as it is clear that your finances are getting critical, contacting your lender or getting online and researching other loan modification options would be a smart idea. There are a lot of federal programs such as Obama’s Home affordable Program that were created to keep struggling homeowners in their homes. Finding some assistance in your efforts to find your way around the process can start with programs like this one.

A loan modification takes your current mortgage and makes changes to it that will make it possible for you to pay it in a reasonable amount of time. Your payments are decreased by doing such things as reducing the amount you owe so that it matches the current value of your house, decreasing the interest rate and turning it into a fixed rate, and/or extending the length of the loan, say from 20 years to 30 years. Missed payments can either be forgiven or put back into your loan so that you begin repayment your mortgage in good standing.

The process takes a long time and you have to satisfy certain qualifications to be accepted for a loan modification. In the beginning you have to show real financial hardship. It is better if this difficulty comes from issues beyond your control. Job loss, a bad mortgage, a death of a paying member or your family, military deployment, divorce and illness are all examples of hardships that are beyond your control. While serious credit card debt can also be a hardship, unless you can demonstrate that you were using the credit cards as a means pay bills and eat, this can actually harm you. It is a tightrope walk.

You likewise must prove to the bank your commitment to keeping your home and paying on the new mortgage. They will want you to create a budget. According to the many loan modification rules, your new payment cannot exceed 31% of your gross monthly income. This will help you to come up with a budget that you can live with.

Before you quit and walk away from your home, consider the possibility of a loan modification. A bank would prefer to lose a few thousand dollars on a loan than have a foreclosure property added to their books. The time is right for you to take the chance and work with your bank. Many people will use mortgage loan modifications to remain homeowners in these tough times.

You can learn more about a rate modification and download a step-by-step checklist to help you through the process. Learn about loan modification leads.