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Tuesday 27th of June 2017

Mortgage Rescue Plan: Can it Really Rescue You From the Threat of Foreclosure? PDF Print Email
Finance - Mortgage
Written by: John Roney   
Sunday, 24 July 2011 13:07
It may appear that a new "super hero" has appeared on the scene, ready to rescue anyone being defeated by a crippling mortgage rescue plan, but is this a real "hero" or just some guy dressed in a cape? Can mortgage modifications rescue you, or is it all just hype? What is a mortgage modification and can it really rescue you from the threat of foreclosure? A mortgage modification is an adjustment to your current loan perimeters. It has the potential to lower your current loan payments, or interest percentage, although in some cases it may just be temporary.


It may appear that a new "super hero" has appeared on the scene, ready to rescue anyone being defeated by a crippling mortgage rescue plan, but is this a real "hero" or just some guy dressed in a cape? Can mortgage modifications rescue you, or is it all just hype? What is a mortgage modification and can it really rescue you from the threat of foreclosure? A mortgage modification is an adjustment to your current loan perimeters. It has the potential to lower your current loan payments, or interest percentage, although in some cases it may just be temporary.

A hardship on home loan payments may be caused by many factors. Generally, a loss of income or an increase in expenses can be the reason you can no longer afford your current payments. Obama's federal government loan modification plan was designed to help homeowners who have: Reduction in, or loss of, income. Change in household financial circumstances. Increase in expenses. Lack of sufficient cash reserves to pay mortgage and basic living expenses-excluding retirement accounts, emergency funds
Excessive monthly debt payments and overextension with creditors
Other reasons for hardship-medical, military services, etc.

In the past, people have needed 20% equity in their homes before they can refinance, but Hope for Homeowners relaxes that requirement, meaning that falling property prices has erased much of the equity that homeowners have built up in the past. The plan keeps falling house values from hurting homeowners who can't make monthly payments. If a Hope for Homeowners refinance doesn't work for them, HUD counselors are directed to offer a second option. The President has created a $75 million Homeowner Stability Initiative to modify the mortgage loans of 4 to 5 million American homeowners living in crisis. Lenders may modify certain loans under a consistent set of guidelines in order to lower monthly payments to 31% of a borrower's gross monthly income.

The money in this initiative goes to pay financial incentives of $1,000 to lenders and borrowers who participate in the program. If the lender deems that a modified loan with incentive payments is more profitable for them than foreclosure, the loan is modified. There will be a three-month trial period for modified loans. For the next 90 days, the borrower pays on the new modified monthly premiums, and if that is done successfully the modified loan terms stay in effect for the next five years.

This is a low cost, easy to read home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender.

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