Before signing up with a loan modification company, start with HUD. They may be able to help and they are free:
Hope Now (free service that offers HUD-approved counselors): http://www.995hope.org/ (1-888-995-4673).
Monday, January 19, 2009
Tuesday, January 13, 2009
The Basics of Loan Modification
We're all feeling the economic crunch. Our future president has acknowledged that the end of the recession isn't coming quickly, so what are we to do? We can't pay our bills and hear a lot about loan modifications. But, what are they really?
A Loan Modification is very simply a change in one or more of the terms of a mortgagor's loan which results in a payment the mortgagor can afford. Many lending institutions are providing loan modifications in lieu of foreclosure. Who can blame them. In this housing market, they simply don't want to take the houses back. It makes more sense for them to simply sell it back to you.
However, there are some things you need to know. Not all banks are playing along and many will only under certain conditions. For example, some banks are only offering loan modifications to mortgagor's who have signed up for an ARM. Also, many seem more inclined to deal when a third party has been introduced into the mix.
Beware of the 3rd partie, though. They have fees. These can be exhorbinant - upwards to $4000 before they'll even begin. If you had an extra $4K, you probably wouldn't need the modification.
The bottom line is that loan modifications are a good way to not fall behind on your mortgage and lessen the risk of losing your home. Just do your research and make sure you know what you're signing up for.
A Loan Modification is very simply a change in one or more of the terms of a mortgagor's loan which results in a payment the mortgagor can afford. Many lending institutions are providing loan modifications in lieu of foreclosure. Who can blame them. In this housing market, they simply don't want to take the houses back. It makes more sense for them to simply sell it back to you.
However, there are some things you need to know. Not all banks are playing along and many will only under certain conditions. For example, some banks are only offering loan modifications to mortgagor's who have signed up for an ARM. Also, many seem more inclined to deal when a third party has been introduced into the mix.
Beware of the 3rd partie, though. They have fees. These can be exhorbinant - upwards to $4000 before they'll even begin. If you had an extra $4K, you probably wouldn't need the modification.
The bottom line is that loan modifications are a good way to not fall behind on your mortgage and lessen the risk of losing your home. Just do your research and make sure you know what you're signing up for.
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