Loan Modification Mortgage Relief: No Longer Impossible

by

Lindsy EmeryBefore this year, loan modification wasn’t a viable option of mortgage assistance for the average American. Lenders would only approve a handful of applications a year and homeowners at risk of foreclosure were left with either refinancing or losing their homes. The Bush Administration attempted to give homeowners a method of loan modification mortgage relief in late 2008, but the program did not accommodate enough circumstances to work as speculated. It was estimated to help 240,000 homeowners while it only helped them in the hundreds.

This year (2009) the Obama Administration started off in the midst of the biggest housing market crash in history. In March the Home Affordable Modification Program was put into effect. The program is estimated to aid 4 to 5 million homeowners across the country stay in their homes — that is quite a large number. The program makes loan modification mortgage relief something that anyone can try, not just a select few.

The previous loan modification program would not accept homeowners whose property fell below 95 percent of initial value, while the Home Affordable Modification Program demands that the value have fallen below that to qualify. And with homes falling in value all the time, more homeowners are becoming qualified every day.

But what is loan modification mortgage relief? At the most basic, it is a reduction of a homeowner’s monthly mortgage payments to accommodate their inability to pay it as is. Lenders do this through reducing the mortgage rate based on the homeowner’s debt to income ratio and locking it. At the same time, some homeowners have a portion of the initial principal deferred and even some of the money they owe the lender is wiped clean.

The new lower rate can extend the mortgage up to 40 years, with a possible balloon on payments near the end. This is a great relief and help to homeowners across the country, and as such the lenders have tight criteria as to who can qualify for loan modification mortgage relief. The lenders look at credit, employment history, whether the homeowner is residing in the property, debt to credit ratio, bankruptcy history, current property value, and mortgage payment history.

Each lender is looking for their own specific criteria for loan modification mortgage relief. A homeowner can either search out their lender’s qualifications online or call to get the information and possibly the application. Many lenders offer applications on their website, but even if the website rejects a homeowner that does not necessarily mean they cannot get a loan modification. Even if rejected by the automated application process, a homeowner can try to negotiate with their lender for an agreement they can both agree on. Successfully negotiating a modification agreement can take a lot of time and sometimes ends up a fruitless endeavor, but with lenders opening up to modifications each day there is no reason not to try.

For more essential tips about how to get approved for a

Loan Modification

– visit my simple, no nonsense loan modification guide and resource:

Home-Loan-Modifications.info

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