| Mortgage Loan Modifications - What Are They & | | | | restructure the financing in order to avoid losing their |
| Who Qualifies | | | | homes. |
| There is a lot of talk these days about mortgage loan | | | | A true loan modification is a permanent solution that |
| modifications. Visit Here | | | | serves the best interests of the investor who owns |
| The Treasuryand the FDIC are both strong | | | | the loan as well as the homeowner. They result in a |
| proponents of widespread loan modifications. | | | | reduction of the mortgage payment to a level that the |
| Lenders do NOT want to take back anyone's home if | | | | homeowner can afford on an ongoing basis, and that |
| they can avoid it. They have already taken back so | | | | will allow the homeowner to stay in their home. This is |
| many they are having a hard time dealing with the | | | | different from a repayment plan or forebearance |
| disposition of those homes already. Distressed sales of | | | | which are typically short term solutions used to resolve |
| REO properties are a major anchor that is pulling | | | | temporary problems. |
| home values relentlessly lower which puts more | | | | Loan modifications do NOT require appraisals, credit |
| homeowners in a negative equity position and increase | | | | reports, or title reports because they are simply |
| the risk of even more defaults and foreclosures. | | | | renegotiations of the terms on an existing Note... they |
| When a homeowner cannot make the payments on | | | | are NOT a refinance. |
| their mortgage there are only three possible outcomes: | | | | A loan modification can consist of a reduction in the |
| 1) The property goes back to the lender through | | | | interest rate, a change from fully amortized to Interest |
| foreclosure or deed-in-lieu and the property goes back | | | | Only payments for 5 to 7 years, an extension of the |
| on the market | | | | loan term, a reduction of the principal balance of the |
| 2) The homeowner sells the home in a conventional | | | | loan (this is rare), and a resolution of any arrearages |
| sale or a short sale and the home goes back on the | | | | (usually by adding them to the loan balance). |
| market | | | | There are 6 specific reasons why Loan Modifications |
| 3) The lender modifies the loan so the homeowner | | | | are BY FAR the best solution to the current |
| can make the payments and the home does not go | | | | foreclosure crisis... |
| back on the market | | | | 1. Loan Modifications keep families in their homes |
| Loan modifications are BY FAR the best solution for | | | | 2. Loan Modifications ease the financial pressure that |
| the lender, the homeowner, and the country in | | | | tears families apart |
| situations were they can work. | | | | 3. Loan Modifications are the least cost solution to the |
| So What Is A Loan Modification? | | | | lenders... that's why they are doing so many of them. |
| A loan modification is a mutual agreement by the | | | | 4. Loan Modifications keep the house off the market |
| lender and the borrower change in the terms of the | | | | and therefore each loan modification represents a |
| loan. In the residential mortgage industry they are being | | | | step closer to the solution to the current crisis. |
| done on a large scale to allow homeowners to | | | | 5. Loan Modifications are a market solution... |