Can A Loan Modification Company Help Me?
In the last year alone, nearly 2 million American citizens have lost their homes due to foreclosure
. In 2009, even millions more Americans will lose their homes to foreclosure if no action to reduce mortgage payments to within their income limits is made. However, how can one go about changing or reducing mortgage payments? Talking with one's lender about mortgage loan modification seems to be one's best option.
What is a loan modification? It is a process where the borrower and lender re-negotiate the terms on the mortgage, or more specifically, the promissory note, such as the interest rate, length of term, or even add a balloon payment. You may wonder why one would engage in a loan modification. Mortgage modifications are most often performed when a borrower has a cash flow issue and needs to reduce the size of the monthly payment.
Loan modifications are not new to lenders. However, getting them to agree to a loan modification request can be challenging and more often than not, a loan modification request is denied. Why? Lenders lose money with modifications. It takes time and money to underwrite the loan modification details, and ultimately they make less money if they lower the interest rate.
However, a mortgage loan company can be willing to consider a loan modification, especially if the borrower is in default and foreclosure is on the immediate horizon. Lenders know that a foreclosure is a losing proposition for them financially because of the great expense in the form of attorney fees, lost interest, short sale, etc. So, if you are having financial difficulty paying your mortgage you may be in a prime position to re-negotiate.
How to Hire a Loan Modification Company.
Generally speaking, the average homeowner hasn't the first clue about such things as interest rates, amortization, and loan financing. So, can these people ensure themselves a reasonable loan modification? The answer is absolutely. There are companies that specialize in assisting homeowners in obtaining the best loan modification possible.
There are many advantages to hiring help with your modification:
*Contacts - Most home loan modification companies have direct contact and good relationship with the lenders loss mitigation department, especially the bigger lenders around the country. By using a loan modification company, you get the networking aspect that helps smooth a modification process.
*Knowledge - Loan requirements change frequently from lender to lender. Having an expert loan modification company assist you can make the process shorter, as they will know what you need to provide to the lender.
The third advantage is results-using a mortgage loan modification company to negotiate for you often leads to the best loan deal for you.
When it comes to saving one's home from foreclosure, the process is an important one. There can be great deals of stress, especially when dealing with uncooperative lenders. However, with the right kind of help and a strategic loan modification, a homeowner can save their home.
by: Robert Smith.
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