There is a terrible problem looming, which affects 30,000 000 home owners in the United States. Increasing numbers of home-owners are losing their jobs, or having their salaries reduced. More and more home owners are, through no fault of their own, falling in arrears with their mortgage, credit card or car payments. These homeowners are in imminent danger of defaulting on their mortgage and seeing their house go into foreclosure. But there is a solution, and many home owners aren’t even aware of this as an option: it’s referred to as loan modification - sometimes called loan mod.

Mortgage loan modification doesn’t involve refinancing, so there’s no credit check required. It is not debt consolidation. What it is, is renegotiating the current loan to affect a reduction in interest rate and, under certain circumstances, a reduction in loan principal. Without increasing the term of the loan. A new, reduced, monthly payment is achieved which is affordable to the home-owner. Loan modification is a real win-win for all concerned parties. To the homeowner it often means the difference between losing and keeping their house. As for the banks, it could signify the difference between remaining solvent or being forced to fold.

There is no reason why home owners cannot arrange their own mortgage loan modification by contacting the loss mitigation dept at their bank. But it isn’t recommended - the banks will often offer only a very small lowering in interst rate, or no reduction at all. Far better to use the services of an established loan modification firm, which has its own team of loan modification lawyers, who do nothing but meet with banks all day long and have the knowledge and experience to accomplish a telling lowering. Doing it oneself is similar to representing oneself in a court of law - seriously unadvisable. An experienced mortgage loan modification firm can negotiate a 30 - 50% reduction in the interest rate without an extension to the length of the loan. It is well worth whatever fee they may charge to accomplish this.

Filed under: John's Message

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