Loan Modification Assistance and the Different Types of Loan Modification Assistance
Going through a foreclosure is a nightmare that nobody wants to face. If you are in a position where a foreclosure is imminent, chances are you are wracking your brain to find a solution. It is time to take a deep breath and not only explore your options but understand the reason you got behind on your payments. Most home owners are not blatantly irresponsible. Most don’t set out to lose a home they have worked to purchase. If you have lost your job, gotten a divorce or experienced any of the multitudes of other reasons people have for experiencing financial difficulties, even when it seems like there is no way out, there is. With the help of Credit-Yogi.com, you have found the perfect place to turn for the help you need.
Here are some topics we need to discuss:
- Will a Loan Modification Stop Foreclosure?
- Understanding the Foreclosure Process
- What is a Loan Modification?
- How Do You Qualify for Loan Modification?
Will a Loan Modification Stop Foreclosure?
Applying for a loan modification will stop a foreclosure at least until you complete the application process and are approved or denied. At worst, with the help of Credit-Yogi.com, this gives you some time to prepare for either eventuality, and at best, you will be accepted, the terms of your existing loan will be modified, so you can afford your monthly payments and stay in your home, which is definitely a step in the right direction. It is, however, important that you act quickly. Time is not on your side in this instance, and every day you wait to get the process started is a day closer you are to foreclosure without a safety net in place.
Understanding the Foreclosure Process
The foreclosure process takes anywhere from six to twelve months. You can use this time to explore your options should the loan modification be denied and you need to find a new place to live, but you can also use the time productively to make every effort to succeed at your attempt to get your existing loan modified so you can keep your home. Foreclosure hurts lenders as well as homeowners, so they are usually willing to work with you when they can. Loan modification assistance just makes good since when you are looking at a foreclosure, because of the degree of expertise they bring to the table, and the willingness of the lender to work with them acting as your liaison in the negotiations.
What is a Loan Modification?
A loan modification is a renegotiation of the terms of a loan. There are government subsidized loans called Home Affordable Modification Program or HAMP, which provides incentives to both homeowners and lenders to modify the terms of the existing loan. Third party Lenders also offer unsubsidized modifications as well that lower monthly payments in much the same way, but without the government subsidies and with less stringent requirements for approval in the program.
How Do You Qualify for Loan Modification?
This will depend on the type of home modification loan you are seeking. For HAMP, you have to complete the following steps:
- Assess Your Personal Worth, debt, and assets
- Show why your mortgage has become a hardship
- Document all income, and prove you have an income and why it has fallen
- Prove ownership and residency in the home
- Prove your loan took place before January 1, 2009
- Be prepared to show that you don’t owe more than $729,750
- Prove that your mortgage exceeds more than 31% of your total gross income
For a third party home loan modification, the criteria is much less stringent, but is based on similar criteria such as a letter of hardship, proof of assets and income, etc. The bottom line is, there is mortgage modification help available, and the best thing you can do to avoid foreclosure and save your home is to act now. A few minutes of your time is all it takes to get the process started toward stopping foreclosure and finding a way to let you keep your home.