Stopping Foreclosure: How to Save Your Home
If you are in danger of losing your home to foreclosure and you are feeling overwhelmed by not knowing what to do to stop it, then you have found the right place to get the answers and the help you need.
The first thing you should know is that you are not alone. There are millions of people who find themselves in the same situation as you do. The current financial crisis has taken its toll on people from all walks of life, with all different backgrounds, living in every corner of the globe. And there is no group of people that this crisis has affected more severely and profoundly than the American homeowner.
Last year almost 4 million families in America lost their homes to foreclosure. This year, another 4.5 million families are at risk of losing their homes.
Millions of Americans are feeling the pain of rampant job losses, higher resetting interest rates on mortgages, fluctuating gas prices and an over all slumping economy. We have all been negatively affected in some way by this once in a generation global economic crisis.
Unfortunately, in the face of this new economic reality millions of people have lost their home to foreclosure, and millions more will follow suit. But this harsh reality does not have to be your fate. There are solutions to your problems and things that can be done to get you out of this situation, and yes, even save your home. The first step is to get the proper knowledge and information that can help you get out of this situation fast, and that is exactly what this site is dedicated to helping you do.
There are several ways of stopping foreclosure of property and losing your home. One of the best ways is by going through a loan modification. But the loan modification process can be confusing, time consuming and frustrating.
What is a Loan Modification?
A loan modification is when a lender agrees to make one, or more changes to the terms of your loan, which results in a lower mortgage payment that you can afford. Loan modifications typically involve one of three options:
- Lowering the interest rate of the loan
- Extending the length of the term of the loan
- Reducing the principal balance of the loan
Each option is designed to achieve the desired result of reducing your monthly mortgage payment, which will enable you to keep your home.
Why Would A Bank or Lender Agree to Do a Loan Modification?
Since so many Americans find themselves in mortgages that are under water, the banks and lending institutions have been asked by the President to work with homeowners to try to restructure their mortgage where appropriate.
It is also important to understand that the banks would rather not have to foreclose on your property. The banks are not in the business of taking over homes, maintaining homes, and selling homes, they are in the business of lending money to consumers and businesses, and when they’re not lending money, they are losing money. Just look at some of the costs that banks endure when they must move forward on a foreclosure:
With every foreclosure a bank processes they incur legal fees, administration fees, realtor fees, and they wind up taking a massive loss on the original loan, as well as on the value that they get when they are finally able to sell the property. So, the bank does have major incentives to working with you to keep your home.
Now, having said that, that doesn’t necessarily mean that banks will therefore make it easy to work with them and do loan modifications. As a matter of fact it’s most often the opposite. Going through the process of negotiating with your bank and getting a loan modification done is usually difficult and overwhelming. Just watch the video below as an example:
Since the foreclosure crisis in America has become such an epidemic, banks and other lending institutions both big and small, are inundated with requests for loan modifications, which are at an all time high. Homeowners are finding themselves spending hours upon hours of their time dealing with their lender on the phone, on hold, leaving messages, being transferred from one department to another, faxing, mailing, and just basically in the posture of waiting. Once the process of negotiating with the lender does finally get underway, sifting through and interpreting the legal and financial jargon can be difficult for most laymen to keep up with, and start to confuse and frustrate some people. It is a difficult process for anyone, but especially difficult for those who are dealing with the anxiety of possibly losing their home, as well as other financial burdens and hardships. Also, having a full time job may make it nearly impossible to spend the amount of time necessary to try to go through the entire process with your bank.
When having the option of trying to negotiate a loan modification with the bank and going through the entire process on your own, or having a professional backed by attorneys handle it for you, we recommend you go with the professional. It will just make the process a lot easier on you, and it will be done right. There is to much that can go wrong when you’re dealing with a process that is so critically important, yet so complicated. However, there are some successful loan modifications negotiated by the homeowner. We just ask that if you intend to do so on your own, that you take the time to educated yourself thoroughly about the process. It is imperative that you know what you’re talking about when you talk to the bank or else it will not get done properly, if at all, and you could find yourself losing what is probably your most precious commodity, your home. Leave no stone unturned if you decide to do it on your own.
Here are some more frequently asked questions:
Will I Qualify for a Loan Modification?
Typically, there are certain qualifications to receive a loan modification, however, different lenders requirements can vary, and continue to change. If you have a mortgage with a high interest rate, have a veritable hardship that is hindering your ability to pay, and can prove your monthly income, then you will qualify with most lenders.
How Long Does A Loan Modification Take?
In most cases, a loan modification can take between 60 to 90 days to complete.
If I Am Behind On My Mortgage Payments Can I Still Qualify for a Loan Modification?
Absolutely! However, if you are currently in foreclosure, you will not be able to get a loan modification.
What if I am already in foreclosure, can bankruptcy stop foreclosure?
You can file for Chapter 13 Bankruptcy to temporarily stop a foreclosure you are currently in, however, there are pros and cons to using bankruptcy to stop a foreclosure. You should definitely consult an attorney before making your decision.
Can I Negotiate My Own Loan Modification Myself?
Yes you can. However, from what we have seen, homeowners get the best results when they have a professional handling the process on their behalf. The loan modification process is not a walk in the park. Most homeowners don’t have the financial and banking experience, legal understanding, or the time and energy to see the process through alone. There are seasoned experts who will handle every aspect of your loan modification with your lender, and work diligently on your behalf to get the job done the right way.
This article was written by, Eddie Woods
Mr. Woods is a real estate expert who specializes in helping individuals and families avoid foreclosure.
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