short sales

A loan modification is a way for a home owner to renegotiate their mortgage with the bank. The goal of a loan modification is to prevent a short sale or foreclosure and keep the current owner in the home with a mortgage they can pay. Loan modifications are still new, and as with anything new you need to be very careful. As things become clearer in this field we will be updating our readers on this page with the latest and greatest information.

The government is currently pushing banks to consider loan modifications in a way to prevent even more foreclosures from coming on the market and keeping home values from plummeting even more. Banks are willing to reconfigure some loans by lowering the current interest rate, extending the loan to a longer duration so the payments are lower and even in some cases reducing the balance of the loan.

To do a successful loan modification the owner will need a good hardship letter stating their current situation and why they cannot continue to pay the current loan as it is structured. This letter needs to contain details, but should be the condensed version as the banks will not have the time or patience to read a long drawn out version. The owner will also need to provide documentation proving what they claim to be true in their letter.

You have no doubt heard the commercials running on television stating call us before your house goes to foreclosure, we can help. Typically these commercials are being run by law firms who are offering to do loan modifications for you. Do you need someone else to do your loan modification? No, you can certainly contact the bank on your own and go through the process, but like anything else hiring someone to do this for you will save you some time and hassle. Whether you hire a lawyer, or a company that specializes in just loan modifications, you need to be careful and do your homework. You should never need to pay someone for a consultation to learn more about the process. If the company or law office is not willing to meet with you and explain the process you will need to go through, you should consider contacting a company like 123loanmod.com who will. While we have never worked with them directly, we have heard good things about them from clients who have worked with them.

The information on loan modifications is changing quickly and like many fast growing and new fields the buyer needs to beware. We recommend you first contact your bank and talk to them about what options are available. Then if you decided to move forward with the assistance of a lawyer or loan modification company we suggest you do thorough research first. As things change we will bring you updates on these pages.

Any real estate agent who is working with a seller who is facing foreclosure or a short sale situation should make sure they notify their clients of the loan modification option. The option is not for everyone, and everyone may not qualify, but for those who can it can be an attractive option.