Loan Modification to Avoid Foreclosure

by admin on February 8, 2009

The current financial crises and global meltdown has taken a heavy toll and it is a gloomy picture. The recession appears to be a long drawn one and job loss claims are on the rise every week. More and more businesses and financial institutions are declaring insolvency and seeking bailouts from the government. Many people who took mortgage loans in the boom time are now struggling to make the monthly payments due to job losses and no other source of income. They are finding it difficult to retain their house and are facing tough times. If you are one of the unlucky ones and have delayed your monthly repayment, due to the above mentioned issues or increase in the floating rate of interest, then you can adopt some measures that will enable you to keep your house and avoid foreclosure.

First and foremost, you must request your lender for some assistance to bear with you for some time, if you feel you are in danger of defaulting. Very often, people do not seek this help out of embarrassment and have to face the law with orders to foreclose.

By forewarning your lender and seeking help, you are enabling him to respond to your plea and it will be easier for him to contemplate assistance. He will be able to arrange for modification of the loan before any credit downgrade occurs and your report suffers. Seeking help in advance is far better than doing it at the 60th or 90th day when action from the law is just some days away.

There are agencies that will approach the lenders for modification of loans, if you are embarrassed to do it yourself. They do it for a fee of course. You can do a study of such agencies and discuss your expectations with them. Please ensure that you take their offer in writing and request them to give you a detailed explanation of their services. This will make sure you are able to hold them to the commitments they made while selling you the service.

If , by any chance you have delayed this action and the law is almost onto you, do not lose hope. You can still retain your house by opting for a loan modification that will enable you to foreclose. Your lender may add the outstanding amount to the loan and you must sit with him to work out an acceptable monthly payment schedule. You can ask for a fixed rate of interest.

You must recognize that it is in the interest of financial institutions to help borrowers retain their assets and hence they will be eager to assist. It is just a question of asking them at the right time and negotiating a workable option.

Tough times do demand extraordinary measures and one must take those measures to retain something that one has worked hard to acquire.

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