When you apply for the federal government's loan modification plan, expect to get a permanent change in the terms of your loan. After you and the borrower come to an agreement, your mortgage will be reinstated and any efforts being made towards foreclosing on your home will be halted.
Since the establishment of the federal government's loan modification plan, mortgage payments have become more affordable. The loan modification process can encompass several steps: lowering the interest rate, extending the amortization of the loan as long as 40 years, and even reducing the original loan amount. A loan modification can be considered successful if the borrower can pay the mortgage without any negative consequences like those that foreclosure would bring.
As you may already heard that there are no penalties or late fees to be paid when you apply for the loan modification. Some lenders do waive these fees, but some roll them into the new loan. Every situation has its own set of advantages and you need to discuss this with your lender to see if you fees will be forgiven or included in the modified mortgage.
Remember that the lender might also want to look at your property and may want to investigate your financial situation before they agree to do a loan modification.
You have to meet several requirements if you are going to be eligible for a loan modification. You have to prove that you will be able to make your payments and that you will not end up in the same situation again. This is why your bank will want to look at your financial statements, proof of income and bank statements.
As government officials and lending organizations have emphasized, you do not have to have made late payments on your mortgage in order to qualify. You can apply for a loan modification even if you think you will experience difficulty in the future. It is better to proactive and apply for a loan modification, rather than avoid reality, become stressed and have to deal with a foreclosure on your home. Don't wait until you are desperate to make a plan.
The federal government's loan modification will help you avoid the stress and difficulty of foreclosure. You will have to prove financial difficulties to your bank and the best way to do this is to write a convincing letter when you apply. The lender is likely to agree to a modification even if you have missed a few payments
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