Friday, January 2, 2015

Don't Wait For a Foreclosure to Get a Loan Modification

One of the most common misconceptions homeowners have is that you need to be on the verge of foreclosure to be able to apply for a loan modification. This is simply not true. Basically, what a loan modification does is adjust your monthly mortgage payment in accordance with your present financial circumstance. Also, a modified loan may entail a reduction in the interest rate, thereby making your monthly mortgage payment more affordable.


If there’s anything to be learned from the recession it’s that financial conditions can change at any time. Several hardship reasons can put a strain on a family’s or individual’s finances, prompting homeowners to seek a loan modification. They don’t necessarily need to be at risk of losing their homes to qualify for a modified loan.

For homeowners who have received a notice of foreclosure, getting a mortgage modification may be crucial to save the property. But time is essential. By law, lending services are required to give several months’ notice before foreclosing on a home. Applying for a modified loan early on is the best option because lenders need sufficient time to evaluate the case whether to approve it or not.
In the event of a foreclosure, a borrower can still apply for a mortgage modification at any point during the process. But there’s no guarantee that it can save the property on time. So borrowers need to act quickly and study their options.

Aside from a loan modification, they can also avail of a deed in lieu of foreclosure, a short sale or a forbearance agreement. Typically, a lender can postpone the upcoming foreclosure sale if some kinds of assistance have been applied for. Again, however, it may take several days for the application to be placed in the system. In any case, it is best to be knowledgeable about any updates about modification of loan and other alternatives to protect your best interests.

By  Eric  Smith 

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