A Loan Modification is an alternative to foreclosure where the homeowner’s current mortgage lender will modify their current home loan by either reducing the interest rate or forgiving part of the mortgage loan balance so the mortgage payments are affordable to the homeowner. To be eligible for a loan modification, the homeowner needs to be employed and the financials of the homeowner needs to be reviewed by the current mortgage lender and the mortgage lender will come up with a monthly mortgage payment where the homeowner will be able to afford.
Loan Modification is an alternative to foreclosure
To modify your mortgage loan is a fantastic process for those under the possibility of foreclosure on their homes. It helps the to rearrange and/or modify their mortgage to a level that suits their economic needs. The true purpose of modifying one’s mortgage is to let homeowners who have financial woes keep up with their payments on their homes, thus retaining ownership. This is of course a fantastic process for any individual or family that may have had a sudden change in income, or other such extenuating circumstances.
Loan Modification Process can take 90 or more days
Loan modifications have long gotten a bad rap with lenders, traditionally many people opt to just foreclose upon a property as opposed to utilizing a loan modification. This can be many times because the homeowner has failed to make payments multiple times. After this happens, the person who borrowed has to inquire the lender for a new, improved deal on their mortgage. This is the basic jist of what the process of loan modification involves. This is a very sound methodology for avoiding foreclosure on a home. One of the requirements of loan modification is that a homeowner should have defaulted upon their payments for the last 60 days (at the very least), before the person who lended can start foreclosure upon the property. The process for loan modification can be initiated in one of two ways, as follows.
Loan Modification Florida and HAMP: What is it?
If you are a homeowner who has a loan that is guaranteed or owned by Fannie Mae and/or Freddie Mac, you may be eligible for loan modification through the Home Affordable Modification Program, also known as the HAMP. The HAMP of course has fairly stringent inclusion. There are specific terms such as the loan must have been initiated on or before Jan 1st, 2009. The borrower must be able to prove beyond a reasonable doubt their financial hardship (and thus need for loan modification). This is a fantastic option for anyone who meets the terms living in Florida and seeking a loan modification.
Private Florida Mortgage Modifications
If you have a mortgage that you believe should be modified, you should be aware that private mortgage lenders are not required to honor HAMP, but they certainly have the option to do so. There are quite a few companies who you may contact to speed the entire program up for you. To be quite honest, using services such as this are risky, as they can’t really guarantee success for you. Truly only Fannie Mae and Freddie Mac loans are sure to be eligible for a loan modification in Florida. To find out if you’re eligible, visit http://makinghomeaffordable.gov site, which will give you great advice on what to do in your situation. Of course another good option is to contact your mortgage lender and talk about it with them. Make sure you pay your mortgage during the app process.
Types of Loan Modification in Florida:
- There are various ways to renegotiate your mortgage. The way you do so could be any of the following:
- A reduction in your payments monthly. Possibly for a fixed time period.
- Interest rate reduction
- Switching to a fixed rate mortgage
There are many other ways to modify your loan in Florida, so make sure you don’t hesitate to contact us if you’re considering a loan modification.
Waiting Period after Loan Modification: 2015 Update
There is a one year mandatory waiting period after loan modification to qualify for a mortgage loan.