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Millions of homeowners are struggling to pay their monthly mortgage payments and risk losing their homes in foreclosure.  A bad economy, difficult mortgage loan terms, and decreasing home values have all contributed to this bad situation.  The federal government and lenders have stepped in to try to provide solutions.  Foreclosure is not only bad for borrowers but lenders as well.  The foreclosure process is very costly for lenders and it is hard to recover the amount owed on the loan through a foreclosure auction or short sale.  A hardship loan modification may be offered to borrowers who are facing a financial or personal hardship to avoid foreclosure for both the borrower and lender. 

A hardship loan modification involves modifying the loan terms to make the payments lower.  This is designed to help borrowers facing hardship the ability to still make their monthly mortgage obligations with reduced payments.  This can be accomplished through extending the length of the loan, lowering the interest rate, changing the loan from an adjustable rate mortgage (ARM) to a fixed rate mortgage, or in some cases even some principal forgiveness.

A borrower who is seeking a loan modification must demonstrate that they are suffering from a hardship that makes it difficult for them to make their monthly mortgage payments.  There are several hardship situations that a lender might find acceptable.  Some of these include loss of a job, a reduction in income, divorce or death in the family, military service, a major illness or high medical costs, as well as job relocation.  There could be other situations that qualify as well.  Each individual borrower’s situation is different, and each lender has different criteria that they use to determine hardship cases.

The way a borrower demonstrates their hardship is through writing a hardship letter that is part of the loan modification application.  The borrower needs to write a brief but compelling letter that explains their hardship and their willingness to correct their situation.  A borrower should be honest and to the point in the letter and provide back up documents if necessary such as divorce papers, copies of medical bills, or any other documents which will bolster their hardship case.

The federal government has responded to these tough economic times and is strongly encouraging lenders to offer loan modifications to homeowners facing hardship situations.  In fact the federal government has recently rolled out the $75 billion Homeowner Affordability and Stability program.  Under this program the federal government will actually pay lenders $1000 per loan modification they offer.  If you are a struggling homeowner facing a hardship, a loan modification may be just what you need to help get you back on track and save your home from foreclosure.

Loan Modification, Mortgage

Well, sad but it’s gotten to the point where we needed a section for loan modification scam’s and lawsuits involving them.

Click here to visit the section: http://www.loan-deals.com/category/scams/

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If you are considering a loan modification you probably have several questions.  It can be a confusing time, trying to get your bills under control and deal with an unfamiliar process such as a loan modification. To get your application for a loan modification approved you will need to become familiar with the process and do your research ahead of time.  Here are answers to some of the top loan modification questions to help you understand the loan modification process.

Question 1 What is a loan modification?

A loan modification involves changing the terms on a mortgage to make the monthly payments more affordable.  This may include lowering the interest rate on the loan, extending the length of the loan, or in some cases principle forgiveness.  The goal is to help make the monthly mortgage payments more affordable for a homeowner facing financial hardship.

Question 2 How do I know if I am eligible for a loan modification?

The main thing you will need to demonstrate to your lender is that you have the ability to make the new modified payments according to the terms of a loan modification.  You will need to provide proof of your income and a financial statement that outlines your income and expenses that shows that you will be able to meet the revised monthly mortgage payments.

Question 3 What qualifies as a hardship?

In your loan modification application you will need to demonstrate that a hardship makes it difficult for you to meet your current monthly mortgage payments.  Everyone’s individual situation is different and there are no set hardships, however divorce or separation, death of a spouse, loss or reduction of income, illness, military service, and job relocation are all generally considered to be acceptable hardship situations.  You will need to write a persuasive hardship letter as part of your loan modification application.

Question 4 Will a loan modification help me avoid foreclosure?

Yes, a successful loan modification can help you avoid foreclosure.  The goal of a loan modification is to change the terms of the loan and bring is current so that foreclosure is avoided.

Question 5 How do I get started with a loan modification?

Your first step should be to get a good understanding of the loan modification process.  Once you have done your research, contact your lender’s loss mitigation department and request a loan modification application.

If you are struggling to make your monthly mortgage payments you should definitely consider a loan modification.  The federal government is encouraging and offering incentives to lenders to work with struggling homeowners, so there is help available.  Start your loan modification process today.

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oan modifications are designed to help homeowners facing a hardship save their homes from foreclosure by offering lower monthly mortgage payments.  The loan terms are changed by lowering the interest rate, extending the loan term, possibly some mortgage forgiveness or changing the loan from an ARM to a fixed rate loan.  If you are facing a hardship and interested in a loan modification you may feel overwhelmed with the thought of negotiating a loan modification agreement on your own.  You may think you need expert advice.  There are lots of loan modification companies these days that are willing to assist you, but it can costs thousands of dollars.  Most homeowners who are struggling to meet their monthly mortgage payments don’t have that kind of money available.  Don’t panic.  If you can’t afford to hire a loan modification company you can negotiate your own loan modification by contacting your lender directly.  Here are a few tips to help you get started.

Tip #1 The secret to a successful do it yourself loan modification is knowledge

If you take the time to become knowledgeable about the loan modification process you will greatly increase you chances of having your loan modification approved.  Take time to research loan modifications and understand what your lenders criteria and guidelines are before applying for a loan modification. 

Tip #2 It is critical that you prepare an accurate and compelling loan modification application

Your loan modification application will make or break your chances of getting your loan modification application approved.  You must submit an accurate, complete and compelling application to get your loan modification approved.  Don’t worry though, your lender will provide a checklist of everything that needs to be provided.  If you have taken your time to understand the loan modification process and your lender’s guidelines your next step is to fill out the application forms and provide the supporting documents that your lender requests.  You will need to prove that you are facing a financial hardship and that you will have the financial means to meet your monthly payments on time under the modified loan agreement.

Tip #3 There are more options and incentives for loan modifications available than ever.

The federal government’s new $75 billion Homeowner Affordability and Stability plan recently introduced by the Obama administration is providing incentives to lenders to offer loan modifications to their borrowers.  Borrowers will also receive incentives for making their payments on time.  This should give you even more confidence that you can successfully negotiate your own loan modification agreement.

If you can’t afford the help of a loan modification company to negotiate a loan modification, don’t despair.  Take the time to become knowledgeable with the loan modification process and be sure to submit a solid application and you will have an excellent chance of succeeding.

Loan Modification, Mortgage, Uncategorized loan modifications

LoanModNews on blogspot.com has a good article about ARM Mortgage Modification’s. From the article:

Lenders and the federal government have responded to this crisis and loan modifications are now an option for many holding an adjustable rate mortgage. A loan modification changes the terms of the loan so that the monthly payments are more affordable. This can be accomplished through lowering the interest rate, lengthening the payment term on the loan, partial principal forgiveness or changing a loan from an ARM to a fixed rate mortgage.

The federal government is encouraging lenders to offer loan modifications, particularly ARM mortgage loan modifications. The new Homeowner Affordability and Stability program even gives lenders a $1000 per loan modification to provide incentives for lenders to help troubled borrowers to help stabilize the mortgage industry and financial markets.

Loan Modification, Mortgage, Uncategorized

From the article:

“Question 1 What is a loan modification?

A loan modification involves changing the terms on a mortgage to make the monthly payments more affordable.  This may include lowering the interest rate on the loan, extending the length of the loan, or in some cases principle forgiveness.  The goal is to help make the monthly mortgage payments more affordable for a homeowner facing financial hardship.

Question 2 How do I know if I am eligible for a loan modification?

The main thing you will need to demonstrate to your lender is that you have the ability to make the new modified payments according to the terms of a loan modification.  You will need to provide proof of your income and a financial statement that outlines your income and expenses that shows that you will be able to meet the revised monthly mortgage payments.”"

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Loan Modification, Mortgage, Uncategorized Loan Modification, modification questions

San Bernardino, California - Attorney General Edmund G. Brown Jr. announced that three individuals have pled guilty to loan modification fraud against hundreds of “desperate California homeowners” and were sentenced to as much as 6 years of prison.

“While doing nothing to help and pocketing all the money, these individuals ripped off desperate California homeowners who paid thousands of dollars to stop the foreclosure of their homes,” Attorney General Brown said.

The defendants sentenced were part of a foreclosure scam engineered by the First Gov company, which was based in San Bernardino, California.

* Rosa Conrado, 51, of San Bernardino, was sentenced today to six years, four months of prison for 6 counts of grand theft.

* Alejandrina Maldonado, 33, of St. Lucie, Florida, was sentenced on February 26, 2009, to a three year prison term for one count of grand theft.

* Martin Jesus Flores, 33, of Baldwin Park, was given three years of probation today based on his limited participation in the scheme.

* David Giron, 44, of Ontario, and Saul Amador, 23, of West Covina are scheduled for a preliminary hearing on March 19, 2009, for theft, money laundering, and conspiracy.

* Three other members of the ring - Juan Jose Perez, 48, of Grand Terrace, Isuara Hernandez, 33, of La Habra, and Antonia Gonzalez, 66, of San Bernardino - are believed to have fled the jurisdiction and may be out of the country.

Read more…

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Don’t Make These Do It Yourself Loan Modification Mistakes

A loan modification can really help if you are a suffering a financial hardship and having a hard time meeting your monthly mortgage payments.  You can successfully negotiate a loan modification yourself by dealing directly with your lender, but you do need to have the proper knowledge and present a compelling case for yourself.  Here are 7 do it yourself loan modification mistakes that you need to avoid in order to be successful at getting your loan modification approved.

Mistake #1 Contacting your lender about a loan modification without understanding how the process works or what your lender’s requirements are.

You need to become familiar with the loan modification process itself and also what your lender’s requirements are before you ever contact them.  Do some upfront research on loan modifications and also see if you can find any particulars about your lender’s criteria before contacting them.

Mistake #2 Hiring an expensive loan modification service

You can do a loan modification yourself so there is no need to pay huge fees to a loan modification company.  If you do decide to hire a service, make sure you thoroughly research a loan modification company’s background and credentials before paying any fees.

Mistake #3 Talking to your lender’s collection department

If the collections department contacts you, they are not the ones that can help you with a loan modification.  You need to speak with your lender’s loss mitigation department.  They are the ones that handle loan modifications.  The collections department simply wants to collect on a debt. They are not equipped to help you with a loan modification.

Mistake #4 Not writing an effective hardship letter

Your hardship letter needs to be concise and compelling.  It needs to describe your financial hardship and convince your lender that the reason you are behind on your mortgage payments are because the payments are too high given your financial situation.

Mistake #5 Preparing loan modification applications that contain errors or omit information

It is imperative that you submit an accurate and thorough loan modification application that contains all the information your lender has requested.  Mistakes can delay and even cause your application to be rejected.

Mistake #6 Requesting an unrealistic loan modification

If you propose a loan modification that doesn’t meet the criteria of your lender your request for a loan modification will most likely be rejected.

Mistake #7 Not submitting a complete loan modification application

If you are missing forms or proof of income requested by your lender your application could be rejected.  With so many requests for loan modifications these days, you need to be sure you submit an accurate and complete loan modification application.

Do it yourself loan modification is possible.  Do your upfront research, propose a realistic loan modification request that is in line with your lender’s criteria, and submit an accurate, complete, and compelling loan modification application.

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