The Advantage of Getting a Loan Modification Package
Every month mortgage foreclosures become more and more common all across the United States. The number of homeowners who struggle but fail to make their mortgage payments are increasing dramatically. Banks don't like foreclosures any more than homeowners. Unlike what is commonly believed, banks do not make money from foreclosures and they don't want to do them. A much better option for both parties is a loan modification. A good loan modification will help the homeowner keep their home and will allow the bank to regain its money. There are other options, like refinancing and consolidation but they are only band-aid solutions. Loan modifications are usually seen as the best solution for banks and homeowners that will stand the test of time as well as benefit the real estate market and the general economy.
Another positive point is that loan modifications help the homeowner maintain a good credit rating. A foreclosure has a lasting, damaging effect on credit scores, which is very difficult to overcome. A loan modification helps the borrower not only manage his mortgage but also allows him to avoid future trouble. From the bank's point of view, they do not experience any loss because all fees and other expenses are rolled into the revised loan. Also, there is a very reasonable expectation that the borrower will make the revised payments on time since they have been tailored to fit his budget.
Who is Eligible to Apply for a Loan Modification?
The lender ultimately makes the final decision about who gets a loan modification and who does not. There are some things that the lender expects the applicant to do before a modification is granted.
1. It is expected that the borrower be motivated to save his house and do all the paperwork needed in order to accomplish this. If you think you may be applying for a home loan modification you need to gather all your bills, write a budget and develop a clear action plan that tells the lender how things are going to be better so your chances of approval are maximized.
2. You have to show that you are experiencing financial trouble. You have to be able to prove that your monthly disposable income has been reduced, so much so that you cannot pay your mortgage bill. Of course, this has to be the result of a crisis such as job loss, a reduction in your pay or another catastrophe, not just because you spent too much money or were irresponsible.
3. It is imperative that your plan of action makes it clear you are going to be able to pay your modified mortgage regularly and on time. You must be able to show that you can do this by showing what you think your future income and expenses will be and a copy of your future budget.
In short, a loan modification can be the answer for homeowners who are trying to save their homes. Mortgage lenders would rather negotiate a loan modification rather than proceed with a foreclosure, if the homeowner can convince the borrower that they are serious about keeping his home and will be able to pay the modified mortgage. All in all, a loan modification package could be the perfect solution if a homeowner is facing foreclosure. Everyone, both the lender and borrower, win in this situation.
With the downturn in the economical situation and the real estate market, loan modification packages have been in the public's eye more and more often. Many regulations regarding loan modifications have been relaxes or eliminated in order to make it easier for homeowners who are suffering financial difficulties to find relief.
Another positive point is that loan modifications help the homeowner maintain a good credit rating. A foreclosure has a lasting, damaging effect on credit scores, which is very difficult to overcome. A loan modification helps the borrower not only manage his mortgage but also allows him to avoid future trouble. From the bank's point of view, they do not experience any loss because all fees and other expenses are rolled into the revised loan. Also, there is a very reasonable expectation that the borrower will make the revised payments on time since they have been tailored to fit his budget.
Who is Eligible to Apply for a Loan Modification?
The lender ultimately makes the final decision about who gets a loan modification and who does not. There are some things that the lender expects the applicant to do before a modification is granted.
1. It is expected that the borrower be motivated to save his house and do all the paperwork needed in order to accomplish this. If you think you may be applying for a home loan modification you need to gather all your bills, write a budget and develop a clear action plan that tells the lender how things are going to be better so your chances of approval are maximized.
2. You have to show that you are experiencing financial trouble. You have to be able to prove that your monthly disposable income has been reduced, so much so that you cannot pay your mortgage bill. Of course, this has to be the result of a crisis such as job loss, a reduction in your pay or another catastrophe, not just because you spent too much money or were irresponsible.
3. It is imperative that your plan of action makes it clear you are going to be able to pay your modified mortgage regularly and on time. You must be able to show that you can do this by showing what you think your future income and expenses will be and a copy of your future budget.
In short, a loan modification can be the answer for homeowners who are trying to save their homes. Mortgage lenders would rather negotiate a loan modification rather than proceed with a foreclosure, if the homeowner can convince the borrower that they are serious about keeping his home and will be able to pay the modified mortgage. All in all, a loan modification package could be the perfect solution if a homeowner is facing foreclosure. Everyone, both the lender and borrower, win in this situation.
With the downturn in the economical situation and the real estate market, loan modification packages have been in the public's eye more and more often. Many regulations regarding loan modifications have been relaxes or eliminated in order to make it easier for homeowners who are suffering financial difficulties to find relief.
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