If you are having a hard time meeting the monthly payments on your mortgage, then it might be time to find out more about a mortgage loan modification. Common reasons for needing a loan modification include; a loss of income, a lay-off or reduction of work hours, divorce or separation, a business failure, a death in the family, unexpected expensive medical bills or prolonged illness, a payment increase on an adjustable rate mortgage, or any number of tough financial problems.
Loan Modifications are primarily open to homeowners in default and those who are risking imminent foreclosure. With a loan modification the idea is to persuade the lender to change the terms of the loan to prevent foreclosure proceedings.
If you are a homeowner facing foreclosure, finding an experienced attorney to provide assistance is vital. Not only is an attorney more capable of negotiating a loan modification, but they can examine all the documents and help make the right decisions for you. You will be responsible for providing all the necessary paperwork and completing the required documents as requested by your attorney. The idea is to save your home and keep a roof over your head, so having an experienced attorney is vital to guide you through this process.
A mortgage loan modification might bring a lot of advantages, particularly an Obama loan modification. These are specifically designed to address those parts of a mortgage that are the most troublesome. Once those are handled, the prospects of success are greatly enhanced. It starts with reducing monthly payments and a lower interest rate. The purpose of changing the terms of a loan is to make the rates more affordable, thus protecting the lender and the owner from potential problems such as foreclosure.
Unlike refinancing, qualifying for a loan modification does not require any fees to be paid to your lender. If one manages to meet the loan modification criteria, your lender will "modify" the terms of the loan. The important thing is that you demonstrate to the lender a situation of financial hardship, soliciting the changing of the loan terms. Upon proving your situation, the lender will need to assess your financial future and obtain a guarantee that you will be able to meet the new payments.
Mortgage Loan Modifications will be based on the current market interest rates when the Mortgage Loan Modification is completed. The date used to determine the interest rate on or loan will be the date that lender approves your Mortgage Loan Modification. Your lender will recalculate your home loan by adding any payments you missed over a 360 month period in most cases.
It has been stated that the banks will no longer take loan modification applications after 2012!! If your loan is from Fannie Mae or Freddie Mac it is estimated that you have until July 2010!! to try to get a mortgage loan modification, so time is running out. Remember you can only apply for a mortgage loan modification if your home is worth less than $729,750.