Mortgage loan modification

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What exactly is mortgage modification and are you interested in learning more about it?  Beware; the Federal government is starting to crackdown on these companies that are “honing” in on the desperate homeowner during this housing crisis that we are experiencing. These scoundrels are taking advantage of homeowners on the verge of losing there homes and they are charging them several thousand dollars to aid them with the loan modification process.

If you are on the verge of foreclosure and you are thinking that this “new” program is good for you ,be sure to stay away from any one who claims that they can save your home but there are fees that are required. If needed, help is free and you can receive information and guidance without paying a dime.

To be fair, there are some companies that will assist with mortgage modifications loans and are legitimate, but some are not. So be careful. The FBI is investigating 2,100 cases of mortgage fraud according to the attorney General Eric Holder.

Loan modification is a permanent change to the terms of your mortgage loan. The loan is restructured so that the homeowner can make the monthly payment without stress. The Lender has the right to have a new inspection done on your property to verify that there are no physical conditions that would effect the homeowner from continuing to make monthly mortgage payments.

The most common mortgage loan modification are loans with above average interest rates, they can be refinanced to market rates. This will benefit the homeowners with the inflated adjustable rates. If the rates are already low then the monthly mortgage payment can be reduced by just extending the terms of the mortgage loan starting at a 30-40 year amortization schedule.

With a mortgage modification, you will have your taxes escrowed and a portion of the payment would go towards your taxes when they become due. If you have accrued late fees due to late payments, in most states the late fees would be waived at the time of the loan modification.

These loans can be risky to the Lender however; they are very helpful to the homeowner by avoiding foreclosure. But if the homeowner fails and defaults anyway, then the loan proceeds to foreclosure and the resolution costs are increased. The homeowners chances of success with this modification is around 50% and this is depending how badly the market has turned.


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