Home owners who find themselves upside down on their mortgages may qualify for a loan modification that will reduce monthly payments, making the loan more affordable. However, contrary to popular belief, a home owner does not need to owe more than the home is worth to submit a request for a loan modification. Those with adjustable-rate mortgages and equity may qualify to modify a loan as well.
Most of the loan modification requests come from home owners who prefer to try to hang on to their home than let it go to foreclosure or attempt to do a short sale. Both short sales and foreclosures affect credit in an identical manner if a Score Factor 22 is entered into a borrower's credit report.
However, some loan modifications call for debt forgiveness, which may include a negative impact on credit as well if the lender writes off part of the existing mortgage.
By fall of 2008, the U.S. government, as part of its Bail Out Program, applied pressure on banks, pushing banks to try to work out loan modifications with borrowers. As a result, some banks decided to hold off on filing foreclosure notices against delinquent borrowers for three to four months, buying home owners more time.
Expand it! This would make a great hub. As far as input, I'd say try to stay away from personal debt at all cost if possible.
by blackbob4 years ago
I am with Bank of america and they have granted me a hardship loan for the next 3 months. What are my chances of getting a loan modification and does anyone really know what the guidelines are I cant get an answer...
by wishingonastar6 years ago
Let me start off by saying that this loan is a Freddie Mac loan. This loan has been sold so many times throughout the 10 years I have lived here. I fell on hard times and tried for a loan modification. My...
by Shepherd's Lamb6 years ago
I just want to discuss what's going on in my little head right now and hope to hear from those of you more educated on the subject.I qualified to buy a condo in 2004 (six years ago). I paid $6,000 cash for...
by erickazoso7 years ago
I'm curious what others think, in my opinion, the current recession we're in is simply the fault of the people that wanted a house and either couldn't afford their loans or didn't educate themselves properly on the loan...
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