Will your bank modify your home loan? | Mortgage

by DanielR.Michaelson

In the United States right now, foreclosure rates are higher than they've ever been. Homeowners are literally fleeing their homes and letting the banks deal with what they leave behind. Since banks are in the banking business and not the real estate business, they don't really want the houses back. If you're in a place where you think you'd be better off leaving your home because you can no longer afford your mortgage payment, you should first look into one of the many programs available to you! It IS possible to re-work your mortgage loan to better suit your financial needs.

Loss Mitigation, Loan Modification and Home Loan workout programs are three options you have. Many companies offer one or all of the programs just mentioned, but before signing up with any company, check them out first! Make sure they are reputable. Financial relief is possible with a successful program offered by the right company.

Let's say you have a home worth $340,000 and you have a $400,000 mortgage at 8%. If the home is foreclosed on, the bank has two options: auction it off, or re-list it. Either option could spell financial disaster for the bank, as doing so could add on another $60,000 in losses.

In this example, bank will lose at least $120,000 if a client decides to "walk away". Through modification and lowering interest rate to 5.25% on a 30yr fixed term, bank will make close to $400,000 in future interest payments. The result is a win-win for all parties involved.

Homeowners can occasionally be successful at working out loan modifications on their own, however default rates with attorney-backed modifications are 5% or less. Self-help modifications are defaulting at over 50%. This is why banks prefer to work with attorneys.

The costs vary for this type of program but are usually fully refundable if the attorneys are not able to modify your home loan. The types of workout remedies that they are able to achieve are amazing. They range from interest rate reductions, lower monthly payments, extended payment terms, and loan principal reduction.

We'd be happy to give you some more information about our loan modification program, so give us a call! We can be reached at 1-888-282-1011. If you're in a financial bind or just need a way out of your adjustable rate mortgage, let us see what we can do to help you!

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Daniel R. Michaelson is a well known public speaker and author in the area of consumer debt relief and has been helping clients for nearly 20 years. You can learn more about his Loan Modification Program.