It actually is possible to modify your mortgage to allow you to stay on your home. Lenders have enough foreclosures their portfolios these days to hold them for years, and really do not want your house. Most anything in the mortgage can be modified, interest rate, term of loan, late fees, and principal balance. Lenders have incentive to modify your mortgage, both from the standpoint of the costs of foreclosure, and some Federal Incentives to keep you in your home.
Mortgage Loan Modification can:
Lowering interest rate is possible; locking the rate to prevent increases can be done as well.
Lowering interest rate lowers your monthly payment.
Extending term of the loan can allow for those late fees to be re-applied into the mortgage. This saves you the thousands of dollars the lender wants to ‘catch you up’ on your loan.
Some lenders are actually re-writing mortgages to reflect the lowered value of a house, much like a short sale, but you keep the house. If they have to take a lowered amount from an auction, why not take it from you?
Loan modification involves re-writing your existing mortgage, this means that the expenses involved in a re-finance do not apply, nor do credit scores matter in most cases. You owe it to yourself and your family to check out the options available to avoid foreclosure.
This is a process that can be done by the individual, but is best left to the professionals. Professionals have developed relationships with the lenders over time, and this can be a factor in the negotiations. There may be some costs involved using a loan modification firm, so look for where you can get the best results. Some firms are Attorney based, while others are individuals who have just started in the business, and may not have much of a track record. Do your homework!
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