subject: Home Loan Modification: Did You Get A Higher Payment After All That? [print this page] If you were offered this kind of restructuring, then it appears that the lender has simply added onto your mortgage payments what you owed and re-amortized your loan payments and restructured your loan. Although it is a loan modification, it is not the objective or desired outcome most people are seeking.
The Better Option
A much better way to structure this would be to simply have your lender extend your loan out to a 30- or even 40-year term to reduce your payments. This will allow them to keep a customer happy and maintain their books by not having another borrower default. To help the national economy get back on its feet everyone needs to work together.
Attractive Rates
Moreover, you can stay on your lender to lower your interest rate down to 2 percent, if it will get your payments to the maximum allowable which is approximately 31 percent of your gross monthly income. The objective here is to make it affordable so you can get out of your financial hardship.
Shocking Statistics
The facts are what they are and research shows that approximately 70 percent of mortgage loans that were modified have gone back into default again, mainly due to payments not being lowered at all, and in some situations they were actually more than the original payment. What possibly could lenders be thinking? A professional real estate attorney or reputable loan modification company would surely challenge a higher payment choice. An additional fact is debt restructuring companies and real estate attorney's routinely get better terms than people who do it themselves.
At the present time, the Obama administration is trying to have lenders modify borrowers' home loans under the "Making Home Affordable loan program". This plan calls for lenders to modify the terms of borrowers who are in troubled loans by lowering the interest rate or spreading out the term. In some situations, interest rates can be lowered down to 2 percent and repayment terms can go all the way out to 40 years. Now that sounds like a deal an overwhelming majority would accept.
by: Ray Heinson
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