When Should You Seek a Loan Modification

Posted by admin on Feb 9, 2009

With foreclosure figures going up, homeowners are looking for ways to save their homes. Foreclosure solutions that worked before do not seem to work anymore. A better way of stopping foreclosure is what Americans need.

For many who successfully saved their homes from foreclosure, the solution came from loan modification. And word is spreading fast on how effective loan modification is in saving homes from foreclosure.

Within the housing industry, loan modification is now considered a household term. Yet there are still questions that homeowners need answers to about loan modification. One of these questions is when should a homeowner seek a loan modification.

Since loan modification is widely viewed as a foreclosure solution or one of the loss mitigation options, some misconceptions arise when it comes to the question as to when a homeowner should seek a loan modification. Some believe that you cannot qualify for loan modification until you are behind in your mortgage payment.

The truth is, even if you are on time on your mortgage payment, you can still put in a request for a loan modification. In most cases, having a good payment history places you in a better position when asking for a loan modification.

While it is true that being behind on your mortgage payment is a good reason for asking for a loan modification, you do not have to intentionally skip payments just to qualify. There are plenty of other good reasons to seek a loan modification. These reasons are what are referred to as “hardships.” Hardships include financial problems due to loss of job, expensive medical procedures due to illness or accident within the family, divorce, or death.

Other reasons for seeking loan modification are those that are “technical” in nature. Real estate lawyers believe that most homeowners have in their hands contracts that have unjust terms against them. These contract terms can be used in favor of the homeowner in seeking a loan modification. By letting a loan modification specialist or loss mitigation lawyer examine your contract, he or she may easily find these unjust terms as they are commonly included in every mortgage contract. Most of these unjust terms are contrary to existing laws that cover the legal conduct of your lender’s business. By doing so, it is now the law against your lender. In most cases, this will expedite the approval of your application for a loan modification.

Colorado Loan Modification

Posted by admin on Dec 10, 2008

Because of the continued increase in the number of foreclosure filings in Colorado, there were many changes made and implemented this year. The new Colorado Foreclosure Law gives a longer period of time for the homeowners in foreclosure to look for a foreclosure solution.

The new law resulted in a slowdown in the rising foreclosure figures but it did not stop the increase. Statistics show that despite the implementation of the new law, foreclosure rates for the first half of 2008 still increased by 16 percent all over Colorado. Without the new law, it could be even higher.

The new law is good news only for those who found a long-term solution to their mortgage problems. For most of them, this long-term solution comes in the form of loan modification.

Loan modification works by changing the loan terms on the same loan that the homeowner currently has. The changes in the loan terms are made in order for the loan to be more affordable. This could be done by reducing the interest rate, lowering the principal amount, extending the loan period and spreading out the payments.

This is what the Colorado homeowners need. By making the mortgage payment lower than what the homeowners currently have, the loan is made affordable. Whatever the homeowner can afford today is what he is paying for, securing steady monthly payments. Being able to pay on time is the most effective way to avoid foreclosure.

Colorado homeowners have to be aware of this option that they have if they want to save their homes. Aside from being a permanent solution, loan modification does not only benefit the homeowner. Loan modification also benefits the lender, the housing industry, the government, and the economy. This is because the objective is to enable the borrower to pay for what he can afford instead of giving him more debt or using the taxpayers’ money to pay for those debts.

Detroit Loan Modification

Posted by admin on Dec 8, 2008

With the present financial crisis, the government has plans to bailout the “Big 3” which happen to have their headquarters in Detroit. What about for the distressed homeowners facing foreclosure? What can they expect?

Ordinary citizens of Detroit, just like the rest of America, should not expect any benefit from the government’s bailout programs. This is according to most analysts and observers.

Detroit is among the hardest hit areas when it comes to the number of foreclosure filings this year. In fact, in the October report of Realty-Trac, Detroit registered the highest foreclosure rate among the nation’s 100 largest metropolitan areas. Within this year, close to 5 percent of Detroit’s households entered some stage of foreclosure. This is a whopping 4.8 times the national average.

Many believed that 2007 would be the worst year for Detroit. Last year, a total of 72,616 foreclosure filings on 41,273 properties were reported in the Detroit metro area. This figure is up by 68 percent from the 2006 numbers. Though 2008 is not yet over and data is not yet available, those who predicted a better real estate market in Detroit for this year could be wrong.

These numbers are large enough for any government bailout program. What is left for Detroit homeowners, which is actually more promising than bailouts, is loan modification initiative. Seeing the benefits of loan modification a large number of homeowners have recently sought loan modifications from their lenders, thus, lenders are somewhat overwhelmed.

Recently, Fannie Mae and Freddie Mac announced that they will roll out a plan to modify hundreds of thousands of loans in an effort to prevent foreclosures. According to the Wall Street journal, the mortgage giants, under the federal conservatorships, aim to reduce mortgage payments to no more than 38% of household income.

The Treasury Department will also encourage private lenders, especially banks, to follow the same model. This plea however, is not backed by any state legislation to compel private lending institutions to initiate loan modification to their delinquent borrowers. Fortunately, there are dedicated loan modification experts available who can assist homeowners in cutting down their monthly mortgage payments.

Hard Truths About Loan Adjustment Agreements

Posted by admin on Dec 5, 2008

If you are a homeowner struggling to pay your monthly mortgage, who can you run to? Do lenders offer any options to help you stop the foreclosure process so you do not have to lose your home? Do government programs work in favor of defaulted home owners? If your loan is being unjustly served, as a borrower, are you able to request that a loan adjustment be carried out in your favor?

Here are some of the hard truths on how mortgagors are treated in this country and what can a defaulted borrower do to keep their home from being foreclosed on.

Struggling homeowners cannot expect assistance from lenders and service providers.
Lending has been one of the most lucrative businesses in this country. These investors or lenders may not provide any after-sales support in assisting home borrowers that run into financial hardship.

‘HOPE NOW Project Lifeline’ offers no hope.
The people who fund this stuff are the same people who do not want you to be relieved of your default mortgage payments. And who are they? They are your lenders.  They usually will continually give you the run around, but will never provide you with the knowledge that you are able to take some sort of legal action against them. Why? The law of self-preservation applies here.

Lenders will not pay any attention to your request for loan modification until it is too late.
Even if you have enough reasons to declare that you are incapable of paying future bills, if you are not behind on your payments for at least three months, all the lender will care about is collecting the payments from you. When you reach that three-month default, foreclosure is already imminent. What’s even worse is that loss mitigation procedures can last a few months.

Foreclosure is usually inevitable especially if you are fighting the battle alone.
This is why a loan modification company is so necessary. You need an armed institution to fight for you against the Goliaths of the industry.

A good loan modification company must be attorney-backed since there can be a lot of legal matters involved. You can file for a loan adjustment even if you are not behind in your payments.  This would be necessary if you foresee yourself not being able to handle future payments.  The possibility of getting your request approved is especially high if you feel that you are a victim of a predatory lending.

LIGLoanMods.com for example, backed by a team of legal experts will perform a forensic study of the documents you have signed with your lender to make sure they didn’t violate any specific laws. In most cases, these legal violations, when properly negotiated, are reason enough to have your payments adjusted to a reasonable level. The repercussions of a legal suit against these lenders are too much for them to handle so they would most likely give in to the borrower’s request for a loan adjustment.

Forbearance and Loan Modification

Posted by admin on Dec 4, 2008

One of the most common worries for the average American is their mortgage payment. It is no wonder that most families prioritize a budget for this money consuming machine. But life is all about surprises. One day, you may walk away from your house because of some unexpected event. A divorce, health problems within the family, loss of job, these could be some of the reasons that budgets are derailed. You wake up one day to a notice of foreclosure.

Fortunately for homeowners, there are options such as LIG Loan Modification Services that can help to stop this scenario from becoming a reality. There are alternatives to a foreclosure and they are within the reach of any homeowner.

One such option is a forbearance agreement. Forbearance is basically a request from the lender to suspend the payment of monthly amortization within a specific period. The borrower can choose, but is not obligated to pay, the interest only during the period of a loan suspension. If he cannot pay that interest, it may be added to the interest in the future payments after the termination of the forbearance. Or it can be added to the principal, thereby, extending the payment period.

Forbearance could be granted for a year. After it is served, the borrower continues with the usual payment. Hopefully, he has recovered from his previous financial constraints. This is a good form of temporary relief of such a heavy financial burden. This is good for those who are in temporary crisis such as temporary loss of job.

But for those who are looking for a long-term solution with their monthly mortgage bills, loan modification proves to be a life saver. Loan modification takes forbearance much further. With loan modification, it is possible not only to suspend your monthly payment, but to also reduce it to a lower one.

This is now the most preferred call to action for most homeowners facing possible foreclosure. Like any other method of anti-foreclosure measures, loan modification seeks approval from the lender. But unlike other measures, in loan modification, homeowners can assert rules in prevailing real estate conditions. If a homeowner found out that the property that they are making mortgage payments on is not worth the amount they are shelling out then loan modification is a way to adjust future payments. If the homeowner finds that their homes are worth every penny that they are actually paying for it, but still don’t want to lose it in a foreclosure or short sale, then loan modification gives them a sense of control to their situation.

Also, unlike a short sale, where you need a real estate lawyer, a real estate broker, a real estate agent, and an accountant, in loan modification you only need an expert to accomplish the job for you. A loan modification expert negotiates directly with your lender. He knows what it takes and how to communicate with the decision makers to make necessary adjustments to your mortgage.