What is a Loan Modification Program? – Getting the Facts

In the past few years, the real estate industry has been through some real ups and downs. The down part of this industry has caused many people to wonder, what is a loan modification program? If you are facing foreclosure or going through a financial hardship, a loan modification can be the answer to your prayers. Here are a few facts about a loan modification.

Fact 1-If you owe more on your home than it is worth, there is probably not a whole lot anyone can do for you. Most lenders will not touch an upside down mortgage.

Fact 2-If you have a high interest rate or a variable rate mortgage due to subprime or unscrupulous lending practices, the federal government’s making homes affordable program can most likely put you into a mortgage that has a low fixed rate.

Fact 3-If you have a mortgage that is backed by Freddie Mac and Fannie Mae, you may qualify for a low interest refinance. There are certain criteria you must meet, but they have to do with the value of your home mostly.

A loan modification is a revision of your loan that changes the terms. The terms are adjusted so that the payment is affordable to the homeowner and acceptable to your lender. Most lenders have developed loan modification programs out of necessity. They are not in the real estate business and have no desire to have procession of your home. It is in both parties best interest to come up with loan terms that will work for both the lender and the homeowner.

There is any number of programs that are available to save your home or get you out from under an overwhelming situation if that is what you are looking for. If you need a few payments added to the end of your loan, most lenders are willing to do that. To a lender anything within reason to keep you in your home is better than them ending up with your home in their procession. After all, lenders are not in the real estate business.

The most difficult part of enrolling in a loan modification program is knowing where to start. Many homeowners are overwhelmed and are wondering where their next payment is coming from. But the necessary information is available. It is a matter of knowing where to look for that information. Are you wondering if you qualify for a federal loan modification or what you need to get approved for a loan refinance?