Mortgage Loan Modification Programs

Over the past few years, homeowners have been researching mortgage loan modification programs. There are many reasons why this process is on the rise, and most of it has to do with the housing crash of 2008. Other economic conditions like lower home prices and current interest rates also spark the drive of homeowners applying for mortgage loan modification programs. Almost half of the home sales in Arizona and California are from foreclosures. This fact alone shows that people are experiencing financial hardship. In order to avoid a foreclosure, a homeowner will research their options with mortgage loan modification programs.

Mortgage loan modification programs are designed to help people avoid foreclosures and obtain a more affordable monthly house payment. The current economy is experiencing high unemployment with very few jobs on the market. People are losing their jobs and are being forced into taking lowered paying jobs. This creates a financial burden when the person has a mortgage loan they need to pay on. A recent cut in pay is the perfect example with why someone would apply for a mortgage loan modification program. There are many different types of mortgage loan modification programs that can be found online.

Refinancing a mortgage loan is also an option that homeowners have, but the current credit crunch is making it difficult for a homeowner to qualify for refinancing. The refinancing process deals with finding an alternative mortgage lender to pay off the existing mortgage loan. Since this process requires a credit check and a debt-to-income ratio check, the homeowner may not be qualified to refinance their home. On the other hand, mortgage loan modification programs work differently. Instead of seeking out another mortgage lender, the homeowner will be working with their current lender to adjust the mortgage loan terms. This process does not require the homeowner to pass a credit check.

The homeowner will also not have to prove they can afford the modification to their current mortgage, since they are already making payments on the loan. However, mortgage holders should remain current with their mortgage loan in order to have the ability to work with their current mortgage lender. If the homeowner is late on their mortgage, the homeowner may experience late fees and payments that will need to be fixed before modifying the loan. However, some mortgage loan modification programs are actually designed to help those who are already struggling making their mortgage payments.

Depending on the mortgage company, there are a few factors that the homeowner must meet in order to modify their existing home loan. First off, homeowners must prove a financial hardship with their current monthly mortgage payments. This can be done through bank statements, deposits, paychecks and other financial information. Some mortgage loan modification programs also require the homeowner to be late on their mortgage, typically 3 months. The homeowner must prove that their home is their primary residence. In other words, owning multiple homes will be more difficult to modify a mortgage loan.

Those who have filed bankruptcy will not qualify for a mortgage loan modification program. Homeowners who try to default on their mortgage on purpose in order to modify their loan will also be disqualified to modify their mortgage as well. Mortgage loan modification programs are available with most lenders, and homeowners who are struggling with their home payments should research their options online. Homeowners are advised to speak to their lender to go over the options with modifying their mortgage loan. This process has helped hundreds of thousands of families avoid foreclosure and even bankruptcy. Mortgage loan modification programs are designed to keep people in their homes, especially during our current economic condition.