Millions of Americans are facing foreclosure. If you're behind in your mortgage payments, however, foreclosure isn't your only option. Loan modification is a far better solution.
The presidential candidates have talked about it during the campaign, and with $50 billion in federal bailout money set aside for it, lenders are being given an extra incentive to change loan terms in lieu of foreclosing.
But what exactly is a loan modification? A loan modification is a new agreement between you and your bank to modify your loan terms - either reducing the principal you owe or switching to a lower fixed interest rate -- to offer more affordable payments. The goal is to keep the borrower in the home, avoid foreclosure and maintain the integrity of the neighborhood.
Loan modification can also allow borrowers to catch up on missed payments and eliminate late fees. This allows home owners to wipe the slate clean and start over with payments they can afford.
No two set of circumstances are alike, but banks are accepting loan modification applications for a variety of reasons, including divorce/separation, loss of income, death of spouse, illness, job relocation, military service and sudden increases in loan payments.
The No. 1 criterion to qualify for loan modification is a person's ability to make the new modified payment now and in the future. A homeowner only needs to supply the lender with proof of income, along with a complete and accurate financial statement detailing income and expenses. The lender's chief concern is that a person be able to afford the new lower payments.
People applying for a loan modification should include with their application a compelling letter about their circumstances. The letter should include how they got behind on their payments and how they will be able to keep up with the new lower payments after a loan modification agreement has been made.
The best thing you can do as a homeowner is to educate yourself as much as possible before speaking with your lender. Knowing your rights and options is essential in getting the best deal. Loan modification is a 1-time shot at a second chance and getting it right is crucial as a homeowner.
The proposed bailout plan will only be available for the first 3 million home owners, and those who want a loan modification will need to be 1 of the 1st to apply.
Don't join the millions of Americans who will lose their home this year. Look into modifying your loan by going to www.TheLossMitigationSpecialists.com. Complete a quick online form and you'll get a free evaluation of whether you qualify for loan modification.