Top 10 Questions About Loan Modification
These are the top 10 questions about loan modification that anyone in financial difficulties should read.
#1 Q: The government and different lending institutions promote loan modification as a sure way to prevent foreclosure. Is that actually true?
A: The program was designed to aid homeowners and to reduce the number of foreclosures that have caused the housing market to become unsteady.
#2 Q: I heard about the loan modification plan President Obama has proposed but I didn't understand the specifics. What exactly do you mean by loan modification?
A: If you cannot afford to meet mortgage payments, you might be able to negotiate better terms with the lender through this program. These terms will be changed permanently and you can expect a lower interest rate.
#3 Q: What are the eligibility criteria for the loan modification plan?
A: There are several eligibility criteria: monthly payments exceeding 31% of the gross monthly income, loan taken before 2009 and an unpaid principal under $729,750.
#4 Q: It has been mentioned that loan modification is designed for those risking foreclosure. Can I still qualify if I'm not behind on my payments?
A: The bank does not require you to be at risk of foreclosure in order to negotiate. You just need to prove that you are no longer able to meet your payments and they will accept your application.
#5 Q: Do I need someone to represent me in the process regarding loan modification, or can I take care of it myself?
A: The answer to this question depends on how much you desire to enter the loan modification program. It is in your best interest to hire an experienced lawyer.
#6 Q: Is the reason for ones' financial difficulties important for the success of the application?
A: Given the numerous reasons that may have led one to default on the payments - the loss of your job, death in the family or illness - it is recommended that you state that reason in a hardship letter.
#7 Q: How long does it take from the moment my application is accepted to actually completing the process?
A: It can take anywhere from several days to a month, depending on the existing financial situation and the foreclosure stage.
#8 Q: Is refinancing the same as loan modification?
A: No, they are two distinct financing options.
#9 Q: I am behind on my payments already. Should I take action now?
A: The sooner, the better. Don't wait for foreclosure to happen or you won't be able to enter the loan modification program.
#10 Q: What happens if I participate in the program and I cannot meet the new payments?
A: You will have to consult a loan modification specialist and discuss your options.
These are briefly the top 10 questions about loan modification. We hope that you will put all this information to good use.
For even more important loan modification questions and answers, visit my simple, no nonsense loan modification guide and resource: http://home-loan-modifications.info/
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