How a loan modification company can keep your home from foreclosure

President Obama's Loan Modification Plan plans to save you and your family from living in the streets when things get too tough to handle. During these hard economic times, millions of American homeowners are in jeopardy of facing foreclosure. But, the top question on everyone's mind is whether a mortgage loan modification plan would work to save you and your home. You need to know more about the Homeowner Affordability and Stability plan to get your loan restructured.

Obama's loan modification plan is worth $75 billion. This large amount aims to provide help in the loan restructuring of non-delinquent borrowers who are having a hard time keeping up with housing mortgages. This new plan has been devised to prevent financially strapped Americans from being unable to continue to pay for their own homes.

A common misconception about a mortgage loan modification company is that you should be a delinquent borrower to avail of the bailout. This is not true. You only need to be able to prove that you are at risk of being unable to pay for future loan payments. You can have your loan restructured if you are directly affected by rising interest rates or if your monthly mortgage payments have been increased drastically to the point where you can no longer handle it.

Although financial lenders are not absolutely required to participate in Obama's loan modification programs, the government is providing them with encouragement to help modify or restructure loans through nice incentives. For example, if your financial lender modifies your loan, then the company will receive $1000. On top of this the lending company will continue to receive $1000 annually if you do not default your loan for the next three years.

Where to go to take advantage of Obama's loan modification program

Given the current economic climate and the sheer amount of doubt that is currently surrounding the American market; many American homeowners are currently trying to find options to help them keep their homes, particularly if they are having difficulty affording their current mortgage. One potential solution that exists is a mortgage loan modification. This type of loan is becoming used more and more by homeowners who are struggling to make their monthly mortgage payments on time. Home loan modifications are different than a lot of other financial products. To begin with, it's not really even a loan.

Obama's loan modification program has been specifically designed to change the loan that the homeowner already happens to have. It's an amazing opportunity to secure much better terms on the existing loan, and provides the help the borrower needs to be more successful in paying back their debt in a timely manner.

Not everyone is going to qualify for one of these types loans and the best way for individual homeowners to find out if they are eligible is for them to seek out a consultation with a company that deals with loan modification help specifically. These professionals can then help figure out whether you specifically meet the criteria for this type of loan. Though the criteria is be different on a case-by-case basis, most mortgage financial lenders will base their qualifications on some common factors such as the length of the loan, the outstanding balance that is owed, and then comparing the monthly payment to the borrower's current income.

Homeowner's that find themselves to be within a given range may be able to qualify for the loan. After the initial free consultation, borrowers at this point will have to apply for the mortgage modification loan. It's usually going to be a written application, and potential borrowers will also have to submit documentation of their current income, any tax records as well as bank statements that they have access to. Additionally, for many financial lenders, borrowers will also be required to write what is referred to as a "hardship letter" which goes about explaining the circumstances that led to the homeowner being unable to meet their monthly payment obligations.

Even though not everyone is going to be able to approve for this type of a loan, mortgage modification loans can be one of the best ways that struggling homeowners can go about renegotiating the terms of their existing home loans in a simple way. It's just one of several different ways that customers who are in imminent danger of losing their homes to foreclosure can go about finding a means to keep afloat.

Indymac Fedral Bank Launches a New Loan Modification Program

You do not need to worry any more if you are a troubled home owner. Indymac has introduced recent loan modification program related services which would make a huge difference to reduce foreclosure.

According to the recent refinanceitt loan services, a qualified mortgage can be changed in to a reasonable mortgage loan with the rate of interest rates at the present Freddie Mac rate of interest rate for assuring mortgage loans. Get the most recent updated on IndyMac loan programs at Refinanceitt. At the rate of 38% debt to income ratio, the mortgage modifications are customized to provide reasonable mortgage payments. The payments consist of taxes, interests, principle and insurance payments. The loan modification plan consolidates interest rate decreases, extended amortization time span and principal forbearance that in turns can avoid foreclosure. The time span of loan can be increased from thirty years terms to forty. The IndyMac federal bank has a number of rate decrease options. One of them is a permanent reduction in the rate.

Another one is called as steeped reduction, which can decrease the rate for additional five years. After the plan for five years is over the interest rate of interest of the chosen loan modification services would increase not more than 1% per year until it is capped at the Freddie Mac mortgage rate. It will then remain at this rate for the left over period of the loan in form of fixed rate mortgage. Indymac also decreases the amount owned by a homeowner in order to make the per month mortgage payments more reasonable. All of these loan modification features can be made use of by themselves or can be combined to make a reasonable payment for the homeowner and what suits the ability of the IndyMac’s financial status.

All the homeowners who have the first mortgage are owned by Indymac can avail streamlined loan modification loans. However, the consumer should be strictly delinquent or in default to qualify. Indymac will also help those homeowners who are not able to pay their mortgage because of payment resets on adjustable rate mortgages (ARM loans). The approach of streamlined loans is applied to mortgages for only residences, which are primary. Second homes and other investments are not qualified for this type of loan modification program. Similar to major loan modifications, all homeowners have due accounts of mortgage will have to prove their financial instability by providing a document of their income and a letter of hardship. This includes pay stubs, two years of tax returns statements and bank statements. If you do not possess an income, you might not be lucky enough to avail this. IndyMac wants to assure that you get affordable mortgage payments and you are able to handle them.

Loan modifications have replaced refinancing as the most sought after home loans

Home loan modification is a homeowner's best chance to avoid foreclosure and now there is additional help for Fannie Mae and Freddie Mac mortgage holders. One does have to be proactive to successfully qualify.

The government has also announced a new program as part of the Obama loan modification programs that's specifically tailored for Fannie Mae and Freddie Mac loans to help an individual avoid foreclosure.

Home loan modification is the best tool available to most homeowners to avoid foreclosure. For effective loan modifications it's essential that professional help is available to manage this sensitive and rather complex situation. Home loan modification is one, and probably the most effective way of avoiding a foreclosure. When the loan terms of a current mortgage receive mortgage loan modification to lower payments it is termed as a loan modification without having to refinance. To take advantage of home loan modification an individual has to produce a hardship letter.

Obama loan modification offered by the Federal government is totally voluntary. The lenders are offered cash incentive for providing loan modifications. There is qualifying criteria to offer help under the Obama loan modification programs.

Several other things that a homeowner can do to avoid foreclosure include things like responding to letters from their lenders; don't abandon the home and contacting a nonprofit HUD approved counseling service. Other alternatives include loan reinstatement, repayment, redemption, and short sale, refinancing, and filing for bankruptcy or deed-in-lieu of foreclosure to avert foreclosure.

Services of nonprofit credit counseling agencies and bankruptcy may also be considered. Many options exist to avoid foreclosure all these should be examined before settling on any particular course of action. However, home loan modification is one of the best alternatives and the Obama loan modification programs are supported by the US government.

Obama's Loan Modification Relief Plan

Loan modification is an easy process, only if you try to get some things right. Many people are denied loan modification facilities, and you might be next. You need to get many things right so that your loan modification is approved.

As noted the Home Affordable Program will be accessible to 4 to 5 million homeowners with a strong payment history on the current mortgages which Freddie Mac owns. Borrowers might not able to refinance because the value of their homes have dropped and this has pushed their loan-to-value ratios to more than 80%.

Financial hardship letter

Lenders will ask you to submit a financial hardship letter. This letter will contain the reasons for home loan modification. You should also state your personal problems, which have resulted in your financial troubles. Loss of a job, an unexpected divorce etc can be mentioned in this letter. Dates clashing with your inability to repay your monthly mortgage payments are to be mentioned in the financial hardship letter. You are advised to keep accurate time lines, which enables the bank to understand the problems, and help you in a much better way. This way you can ask for lower monthly payments. You can mention that you have taken up another job to meet your financial requirements. Inclusion of these points makes the letter more acceptable to the lender, and gives the lender a good idea of the current situation you are experiencing.

Personal budget worksheet

A personal budget worksheet gives the lender a picture of your debt-to-income ratios. This worksheet will be used to decide your new monthly payments. Lenders don't want to give you a loan that you will be unable to repay, or a loan that is unprofitable to them. Be honest when you fill the worksheet. If you state that your debt is high, this might be taken negatively by a lender. The lender will assume that you cannot support your monthly payments. Fill the worksheet, make your budget plan and submit it to the lender on time. Give the lender enough time to review your application. These loan modification programs will increase your chances of availing a loan modification.

Application and paperwork

You have to fill the basic application form, if you want to apply for a loan. You should meet all your deadlines since your lenders will have very little time to analyze your documents.

Home Affordable Loan Modifications To Avoid Foreclosure

For all people who fall behind or are in risk of falling short in their payments because of financial crises, due to increasing payments because of resetting loan can apply for the obama loan modification program. The first mortgage payment is decreased to 31% of the gross income of the consumer. The treasury department and the servicers are coming together to make this possible. Get details of the Obama Home Affordable Loan Modification at www.refinanceitt.com. However, this loan modification program cannot really help those who are able to make payments for their home loan and those who do not occupy the house in question. Most servicers will take participation in this because of the incentive of the loan program, involvement of the government and standard modification model. You can avail a list of all the participant servicers from the treasury department online after the start of the program. The Home Affordable Loan Modification program helps you extend the foreclosure of your house until the trial period.

Click here for full information on home affordable loan modification

In this process, all permitted costs are listed in to the modified note and the homeowners can pay nothing out of their own pockets. There are some terms and conditions on basis of which you become qualified for the loan modification program.

1. The house should be the primary residence of the owner and occupied with a mortgage originated prior to Jan 1, 2009, which has an unpaid amount less than $729,750.
2. You should have a mortgage payment which exceeds than 31% of your per month gross (pre-tax) income. Include the principle amount, rate of interest, taxes and insurance (PITI) when you are calculating the mortgage modification payment. This 31% does not consist of the private mortgage insurance (PMI) fees.
3. This program is specially set up to encourage services for loan modification prior to defaulted payments from homeowners, but you are still qualified even if you have defaulted on couple of payments.
4. All consumers who are bankrupt and who are following litigation associated with their mortgage can qualify for this program.

The working process for the loan modification program is very easy. Listed below are some important points for the same.

1. Initially you call up your respective servicer. They will ask you some questions regarding your finances. Your income will be verified along with your financial hardship and mortgage.
2. A copy of your recent tax return will be obtained from the IRS to cross check the income along with your latest pay stubs. You need to provide them a warranty that you do not possess enough liquid assets for payments.
3. Your payment will be decreased to 31% by the servicer and treasury department. If your percent is still above 31%, the lender will hold the principle balance. This forbearance will turn in to a huge payment because of the maturity date of the loan home loan modification, upon the sale of your property or on paying off the mortgage balance with interest bearing. However, the lender cannot withhold your principal amount to a level less than the present market value of your house.
4. The servicer can also make use of principle reductions on permanent basis to lessen you DTI as well. The permanent principal reduction does not have to be repaid. The servicers have to pledge your insurance and property taxes on the new loan irrespective of whether they were pledged before.
5. After your respective payment amount reaches 31% DTI and you have signed all the papers, you are introduced to a trial period of 90 days. If you are regular, until the end of this period, your loan is modified on permanent basis and you can start your new loan term.
6. To modify your modification loan, you are qualified for an incentive up to the limit of $1,000/year by the treasury department if you are regular in you payments. The incentive amount will last up to 5 years and it will be directly paid to the servicer to decrease the principal amount on your respective loan.

Keep in mind that the modified loans cannot be assumed. If it is not possible to reduce your payments to 31% DTI, you are eligible for mitigation program of traditional loss. Rather than a foreclosure, the program provides servicer incentives for a deed in lieu or a short sale. The reason why servicers actively participate is that they get paid for loan modification and even more if they succeed in doing so prior to default. They are paid, when the borrower pays on time each year. Because this loan modification program only works for first mortgages, they are given an incentive to decrease or get rid of their liens, if they are working with subordinate mortgage holders. To sum up in short the servicers will always earn more for homeowners who stay for the program rather than for foreclosure in major cases.

Homeowners Losing Hope In Home Affordable Modification Program?

Though the Obama administration is trumpeting over the fact that they have achieved their goal of modifying half million mortgage crisis a month in advance, it cannot be ignored that last month less number of homeowners accepted to modify mortgage loans, as reported by the Treasury Department. The report suggested that even though the eligible count of homeowners increased the number of people who accepted it dropped.

According to the administration this can turn out of a serious problem. According to the data and information collected from 136,560 in June to 186,601 in September, the numbers have grown and homeowners have been taking advantage of the scheme. Everything seem to be right on track from June to August where the number went from 93,146 to 133,192 homeowners but sadly in September it dropped to 100,216. There is service available to which the consumer is refusing to accept, this cannot be a good sign. May be they are not hopeful regarding the tenure of the job or maybe they do not think they can be able to make payments for the Home Affordable Modification Program. No matter what the reason, it is surely left the administration baffled.

There have been a lot of speculations regarding the services, stressing on their incompetence for the home mortgage modification and the whole process of going through a loan modification program. However the people who are refusing for services have already gone through these services. The house owners are waiting too long to give feedback to the administration's Making Home Affordable Program. The agency is marketing itself and spreading awareness. There is a lot of distrust of mortgage service lenders due to the onset of housing crisis. Thus the government is trying its level best to get homeowner back on track. They are also calling them, along with sending them mails so that it is easy for them to have built little faith in them.

Get the Correct Loan Modification Program

To convince a lender to approve and agree to a loan modification request is as good as swimming against a powerful current. This process becomes almost impossible without loan modification help from professionals. Get best professional guidance at www.refinanceitt.com. These professional are a part of the working culture of the loan modification companies. Hence, they are trained to avail the best modification agreements possible, and to negotiate perfectly with lenders to achieve a common goal.

There will hardly be any lender who will approve modification without a very valid and impactful reason. The discussion and words used by a skilled professional can change the tide in the favor of the homeowner. In major cases, the companies who process loan modification levy a fee after the loan application has been filled and given. It can also happen once the homeowner has agreed with the lender on a common goal. Generally the fee for an effectual and resourceful modifications is somewhere between 1 and 3 percent, while the cost after submission of the application can range broadly amid various loan modification programs and companies. The range can be anywhere between $200 to $3,500 dollars. Choosing for the right company is harder than it should be. There are many illegitimate companies, which project as authentic modification companies all over the country. This has created a great problem for the FBI to track these companies and launch an operation nationwide to crack them down.

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There are two ways you can identify a fraud. Authentic companies providing loan modification help do not initiate to seek out for consumers though the lenders might contact on event of default in payment, but a fraud company will get in contact with the homeowner first. Usually the consultation is obligation free and only the paperwork and successful negotiations are charges by legitimate companies. However, scammers ask for consultation charges and further more may ask for another fee providing one of numerous excuses. To avoid all these frauds you can get in touch with the Better Business Bureau who checks the authenticity of loan Modification Company. It is not very easy to make out the fake from the real and sometimes it becomes too late to know, until the consumer has lost money in thousands. To get out of the mess of foreclosure, applying for loan modification services is the most ingenious method.