| Introduction | | | | Modifications must be handled by a special group who |
| Loan Modification is arguably the most effective tool | | | | are more highly trained and better-paid, and the |
| that can be used by homeowners in midst of financial | | | | increased cost of expanding their number cuts into the |
| hardship to prevent their homes from entering | | | | bottom line. Recent state legislation and Congressional |
| foreclosure. Loan modification Agreements come in | | | | initiatives require mortgage lenders to make possible |
| different forms but quite frequently they involve the | | | | every effort to provide loan modifications to |
| reduction of mortgage's interest rate for a specified | | | | homeowners risking foreclosure. In the past, mortgage |
| period of time so he/she can continue to make | | | | note modifications were nearly impossible, but now |
| payments and stay in the home. Beware Paying too | | | | lender are modifying by the thousands. The new FDIC |
| much for a loan modification is detrimental to your | | | | and Treasury program would provide incentives to |
| pocketbook. Loan modification is the most cost | | | | lenders and mortgage servicers to offer long term |
| effective and timely manner to help the millions of | | | | affordable loan modifications. |
| defaulting homeowners get back on track. Loan | | | | Borrowers |
| Modification is a HUD approved workout solution | | | | Borrowers with good credit are now deciding it is |
| becoming more common during this foreclosure crisis. | | | | better for their own personal situation and balance |
| Loan Modification is a procedure in which a loan's | | | | sheet to walk-away from the hundreds of thousands |
| terms, like the interest rate, the monthly payment or | | | | of dollars in debt they owe on their home and opt to |
| the term, are changed to meet the current situation of | | | | rent instead. Borrowers coast to coast have been |
| the homeowner. Loan modifications are the best | | | | benefitting from reduced interest rates that were |
| solution for you and your lender. | | | | renegotiated in the note modification. All lenders ask for |
| Loan | | | | the same general information from their borrowers |
| Loan Modification Specialists (LMS) will be responsible | | | | which they then review to determine if the |
| for initiating the sales cycle by qualifying potential clients | | | | homeowner will qualify for a loan modification. Fannie |
| and then analyzing and determining their specific needs. | | | | Mae, Freddie Mac and HUD offer loan modifications to |
| Loans currently insured by MGIC may be eligible for an | | | | loan servicers and borrowers as a tool in the area of |
| MGIC Loan Modification depending on the details of the | | | | default management. A forbearance agreement |
| transaction. | | | | provides short-term relief for borrowers who have |
| Lender | | | | temporary financial problems, while a loan modification |
| Lenders and servicers are very busy with desperate | | | | agreement is a long-term solution for borrowers who |
| homeowners trying to save their homes from | | | | will never be able to repay an existing loan. Although |
| foreclosure. Lenders have financial incentive to actively | | | | certainly not streamlined or mainstream loan |
| pursue a home loan modification or short sale. Lenders | | | | modifications are generally available to all borrowers in |
| are not in the business of foreclosing on homes; rather, | | | | trouble. |
| a mortgage company will analyze the home owner's | | | | Short |
| situation and if it is possible for the borrower to | | | | Short-sale or forbearance are not good options |
| continue making payments (which is composes of | | | | because they have negative tax and credit history |
| both the principal owed against the home and the | | | | consequences associated with them. Short Sales may |
| interest payments to the mortgage company), the | | | | not always be the answer. If you have incurred a |
| lender will find a solution to help the home owner | | | | short term financial hardship and your loan is 90 days |
| continue making principal and interest payments. | | | | to 365 days past due, the loss mitigation specialist will |
| Lenders will give you the run around, throw confusing | | | | also consider submitting a request for a special |
| "industry terms" at you, refuse to negotiate, or | | | | forbearance. |
| negotiate terms in their best interest. Lenders want to | | | | Conclusion |
| give as little as possible, distressed to borrowers that | | | | Loan modifications used to be reserved for borrowers |
| don't know how to get the best deal, or what the best | | | | whose mortgages became delinquent because of job |
| possible deal can be. Lenders are starting to prefer LM | | | | losses, divorce proceedings, or illness, but today they |
| over a short sale. Lenders "say they're doing all these | | | | are also open to those individuals who are suffering in |
| things, they're trying all these modifications," said John | | | | the aftermath of adjustable rate mortgages |
| Taylor, chief executive of the National Community | | | | skyrocketing and placing the monthly payment beyond |
| Reinvestment Coalition. Lenders look at loan | | | | the means of the borrower. Loan Modification is the #1 |
| modifications on a case-by-case basis. | | | | way to Stop or Prevent foreclosure & Stop |
| Payment | | | | Foreclosure and Rising Payments. Are you behind on |
| Payment shock after interest rate resets on subprime | | | | your payments. Are you losing your family's home Is |
| adjustable mortgages, many made to high-risk | | | | your lender refusing your payment. Are you worried |
| borrowers, has propelled owners into foreclosure. Loan | | | | about your credit Loan modification is a term very |
| modification team helps Americans retain their | | | | unfamiliar to homeowners but not for very long. Loan |
| homeownership by renegotiate their mortgage with | | | | Modification Requirements sounds intimidating to the |
| affordable monthly payments. | | | | average homeowner but the process is indeed simpler |
| Modifications | | | | than you might think. Loan Modification- This term has |
| Modifications often consist of lowering interest rates, | | | | been getting a lot of attention lately and rightfully so. |
| fixing interest rates, preventing ARMs from adjusting, | | | | Loan modifications are less of a loss to lenders than |
| lowering your principal balance and/or lengthening your | | | | foreclosure. Consult a reputable group to navigate you |
| term. Modifications would be designed to achieve | | | | through the process. Be leery of anyone who wants |
| sustainable payments at a 38 percent debt-to-income | | | | any money upfront. Make sure you exercise your |
| (DTI) ratio of principal, interest, taxes and insurance. | | | | rights & fight hard to stay in your homes. |