We're all experiencing hard times. The economy went down the drain and most of us can't afford to pay our bills nor our homes. Credit card companies tightening up their regulations and so mortgage companies, so we can't fix an adjustable interest rate to get a more affordable mortgage payment. Also some of us are loosing their jobs on top of it, so how we can change it?
First of all I personally think that we can change it by being strong and patient. Of course being patient and strong will not put money in your pockets, but it will definitely keep your health and your hope in order. You have to understand that probably 90% of the population in America and the whole world is experiencing the same problems as you do.
So what is loan modification?
While you're struggling to make your mortgage payments due to economic changes, the banks and the government developed programs that can help you. The government has many reasons to help homeowners, some of the reasons are:
1.Try to stabilize the economy so it will not crush completely.
2.Banks approved so many bad home loans.
3.Greed in Wall Street, as well as bank ceo's and owners.
4.Government couldn't oversee financial crash
5.Innocent and not innocent homeowners that took loans they couldn't afford from the beginning.
Ok now back to the loan modification process, what is loan modification? Loan Modification is a adjustment of an existing mortgage a homeowner have, it can be with a government loan or a bank loan. Let's say you had a 6% interest rate on your mortgage that was matured and now the interest rate have changed to 7%. Now it's harder for you to make the payment due to increase in the payments and the fact that your job don't pay you the same as before. This is a perfect example of an average homeowner in America today. So what do you do?
There are two different ways you can go with. You can do it your self or higher a professional mortgage modification broker to do it for you. Let's assume for a second you do this your self, what are the steps to do it your self?
1.You contact your bank
2.You will ask for the loss mitigation or collection department.
3.Give them a brief of your financial background today- expenses and income.
4.Write a hardship letter. You basically tell them in the letter why you can't make the payments.
5.They would want to see also some bank statements or pay stubs.
After talking to you on the phone they will process everything you've submitted to them. They want to make sure that this time if they will lower your interest rate and make some adjustments for you, if you could make the payments in order without defaulting on the loan. This process is almost as qualifying for any loan, so you need to know how to qualify your self with no mistakes. I would definitely recommend hiring a professional to do this for you, since they know the market and how to make things happen to you in a legitimate way of course.
The process of a loan modification approximately can take up to 3 months, but it's definitely worth it. You can get a much better interest rate on your mortgage and some banks can also reduce your principle. That's right, you can also lower what you owe on your property, but you will need a very good reason to do that.
There are some mortgage companies and law firms that help homeowners and real estate investors with loan modification. I think that you definitely need to contact a professional do this for you. Be careful from scam artists, because for this service you normally need to pay up front and there are many people out there that will take your money and will not deliver what they've promised.
