Learn How To
Modify
Your
Mortgage
by Michael Licamele |
Mortgage Almanac
Resources for Mortgage Borrowers:
This article
on loan modifications discusses options available for home owners
who are currently have mortgage payments that are too high but
can not refinance because either their credit is poor, they can
not document their income or the value of their home has dropped
significantly. For help right now, click here.
For more helpful
mortgage articles, click here
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Editor's Note:
For details on the Obama Housing Affordability & Stability
Plan announced February 19, 2009, click here.
With the many recent laws passed to help home owners
since the beginning of 2008 and many more to come, home owners
have an increasing number of resources and tools to help them
keep their homes. If you have a mortgage payment that is too
high for your current income or if your loan amount is much higher
than the current value of your home, you probably can benefit
from a loan modification or short sale program. For immediate
help, submit your help request here.
There are several types of loan modifications available depending
on your specific financial situation:
LOAN MODIFICATION
This option is used when there has been a temporary reduction
in income or increase in expenses. We have many types of modifications,
but they typically add the delinquency onto the balance of you
loan and re-amortize the loan. Interest rate and term may also
be adjusted in order to make your loan more affordable.
SHORT SALE
Selling your home is one solution when there is long-term difficulty
making the payments. Unfortunately, property values can decline,
causing a difference between the current market value and what
is owed on the loan. The lender may accept less than the total
amount rather than pursuing a foreclosure. The lender may request
a contribution be made to reduce the total loss but that is always
a negotiation. You must list the property for sale at the fair
market value and forward any offers to the lender for consideration.
Please note: Acceptance of any offer will be subject to lender
approval. Most lenders allow for Realtor commissions and closing
costs to be paid from the funds received from the sale.
REPAYMENT PLAN
A repayment plan allows you to make a regular payment plus a
portion of the amount past due each month over a period of months.
The repayment plan is based on the financial information provided
and it may require a deposit toward the amount past due.
DEED IN LIEU OF FORECLOSURE
(DIL)
If all available options have failed and you are unable to sell
your house, you may be allowed to sign title to the property
over to the lender. You must have clear title to the home with
the exception of the first lien.
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