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Loan Modifications


So, you lost your job or just going through the tough times and unable to continue making your mortgage payments? These scary thoughts are going through the minds of homeowners across the United States. It’s hard to make ends meet but you don’t want to admit it anymore. There is a solution to your problem and it won’t affect your credit as bad as a foreclosure. It’s called a loan modification program. This program allows you to stay in your home while adjusting your mortgage to fit your needs. This is not a handout program. Many banks see that it makes financial sense to adjust the mortgage and allow the homeowner to stay in their property. It saves the banks a lot of money in foreclosing on the property, fixing it up and holding costs associated with the home until it sells. Loan modifications are something that the average homeowner can do and they do not have to go to the expense to hire someone or a company to do it for them. There is no marketing required for your property but there will be a ton of negotiations that go back and forth with the bank. The homeowner has to fill out some paperwork regarding their current financial situation and submit their packet back to their lender. There are many questions that need to be addressed and the homeowner may remain on hold for a long period of time for many days. The second step of the modification process is the hardship letter. This letter needs to be in detail outlining why the homeowner cannot make the payment and also how they will be able to make the payment in the future. A simple statement such as we had to pay our credit cards because we were going to lose them won’t work here. A hardship letter is a hardship situation that the homeowner finds themselves in such as losing a job, death in the family or getting laid off from their job and can’t find another one after an extensive job search. Medical situations are also good reasons to ask for loan modifications. The modification process is not easy and the homeowner can get rejected for the modification numerous times but they should not give up. There are many programs that a homeowner could qualify under and need to research and find the program that works for them. Also, the homeowner could ask the bank’s lost mitigation department what program that they would recommend that the homeowner could qualify for. In addition, the government is offering different programs to help you stay in your home. One such program deals with homeowners refinancing their mortgage with a lower payment. The refinance will shift the risk from that of the lender to the department of FHA and the benefit of the lender is the continuation of the loan. The benefit to the homeowner obviously is that they get to stay in their home. There are certain restrictions regarding selling the home and profit sharing. Although this might not benefit all homeowners, it definitely will help some. The longer you wait the more potential for damage to your credit or even financial welfare you expose yourself or you’re your family to.

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