Owing to the recession and economic shortfall, every American is finding it difficult to cope up with their financial situation. Almost 98% of the homeowners are on the verge of losing their homes. People are finding it hard to work out a probable solution for their problem. In order to save thousands of homeowners from losing their homes to foreclosure, Obama Administration stepped in to bail out distressed homeowners.
The mortgage bail out plan introduced by Obama is referred to as Making Home Affordable Plan. As many as 7 million to 9 million homeowners are expected to benefit from this program. One of the most sought after mortgage bailout plans is Loan modification. Loan modification can help homeowners to prevent their property from foreclosure.
Another important factor to take into account is the lenders’ willingness to modify loans. The government has taken necessary steps in this regard too and lenders that are willing to join the bandwagon are being offered financial incentives for the same. In fact, the government is extending incentives to keep borrowers regular with their mortgage payments. An important factor to consider is you can opt for loan modification only if you qualify for the program. This is one of the major limitations of the program. And homeowners have been complaining about the drawbacks of the program. One of the major drawbacks of the program was that it failed to address the needs of homeowners who had second mortgages. There are many loan modification companies operating in the industry and it is important that you take help
of an authentic loan modification company.
There are 3 ways in which the lender can help you by loan modification. The lender may increase the loan term. Alternatively, the interest rate may be reduced or you can switch over to fixed-rate mortgage. By doing so, your mortgage payments become predictable. In some cases, the principal amount is also reduced.
Important aspects of loan modification
- You need to understand the type of documentation that is required for the loan modification process.
- You need to know the person whom you are supposed to approach to get your loan modified.
- Since the first mortgage bailout program introduced by Obama had many drawbacks, a second program was introduced to address the needs of the homeowners that were not deriving any benefits from the first program. It can help you to save your home from foreclosure.
- Selling your home may also help you in these situations provided you are not “underwater”.
There is yet another way you can prevent your home from foreclosure. You can opt for a forensic loan audit with the help of experienced audit professionals.