Anyone looking for foreclosure relief may qualify for a mortgage loan modification if they are at risk for defaulting on his or her mortgage payment, due to financial hardship. Luckily, this applies even in the case that you are receiving unemployment or going through a bankruptcy. Ultimately, a loan adjustment offers people an option outside of doing nothing. If you do nothing when you are not able to make your mortgage payments then you risk having your home foreclosed on.
What is a Mortgage Loan Modification?
A mortgage load modification involves making a negotiation with your lender. The main goal of the loan modification is to provide you with foreclosure relief by helping you to find better loan terms so that you can continue living in your home. In general, a loan modification aims to help people with getting back on track financially. More specifically, a loan modification helps you to lower your mortgage interest rate.
Additionally, modifications can help you so you can have a clean slate without worrying about having to pay penalties and late fees. In addition, it offers a way for homeowners to extend the term on their loan. On occasion, modifications also can reduce the loan principal of the mortgage as well.
Qualifying for a Mortgage Loan Modification
Generally, any homeowner at risk for imminent default qualifies for a mortgage loan modification. Regardless of whether you are in the middle of a bankruptcy, receive unemployment, or are in between jobs, you can qualify for a loan modification. Two common types of loan modifications include the Home Affordable Modification Program (H.A.M.P.) and non-H.A.M.P. With H.A.M.P., people must meet certain requirements in order to qualify.
Qualification criteria require a homeowner only have a first-lien loan on their primary place of residence. The dwelling must consist of a single-unit residence valued no more than $729,750. Other qualifications consist of current delinquency or the risk of imminent default because of financial hardship. However, not all homeowners can qualify for foreclosure relief through H.A.M.P.
In response, banks have a separately designated non-H.A.M.P. modification department for those looking for foreclosure relief that do not qualify for a H.A.M.P loan. Cases such as this are usually entail those with a home valued over $729,750. However, homeowners must meet other qualification criteria as well. Once approved for a first lien modification, lenders cannot turn the homeowner down for a second lien modification.
Furthermore, the lender must offer first lien modification homeowners a modification on their second lien loan. Another program that works alongside the H.A.M.P. program consists of the Second Lien Modification Program (2MP). The purpose of the program relates to foreclosure relief by creating more affordable solutions for borrowers. Mainly, 2MP aims to lower the amount a homeowner has to spend on their first and second lien mortgage loans so they have an easier time affording their mortgage payments.
Reasons for Modification Denial
One of the main reasons for loan modification denial relates to how people will often fail to submit all of the necessary information with their application to their lender. Therefore, the utilization of software for mortgage loan modification is one of the best ways to ensure you have all of the needed information for your application. In addition, a program such as this can guide you along the way with comprehensive tips on how to negotiate with your lender so you can find the foreclosure relief you seek.
How a Mortgage Modification Works
Overall, loan adjusting can help people to avoid losing their home. However, it is important to ensure that you have all of the necessary paperwork filled out. Additionally, mortgage loan modification software can help people especially when they are experiencing a difficult situation, such as unemployment, income loss, foreclosure, bankruptcy, as well as when you owe more on your home than what it is worth. Therefore, creating the kind of foreclosure relief you need.