Tips on how Homeowners can lower Mortgage Payments
As the nation slowly recovers from one of the worst recessions in recent history, millions of homeowners throughout the United States continue to struggle with their monthly mortgage payments. Many hardworking and responsible homeowners who have fallen victim to the unhealthy economy in addition to the mortgage crisis are facing the threat of foreclosure as well. Although the situation may seem dire, a successful mortgage modification can yield a bevy of positive results, including the possibility of avoiding foreclosure in addition to helping a homeowner keep his or her home equity.
The U.S. Department of Housing and Urban Development (HUD) defines a loan modification as a permanent change in one or more of the terms of a mortgagor’s (homeowner’s) loan, which allows the loan to be reinstated. This process normally results in a payment the mortgagor can afford. A lower monthly payment (sometimes half of the original amount) is just one potential advantage of a successful mortgage modification. Some of the other benefits include:
• An Interest Rate Reduction – Possibly as low as 2%
• Brining a Delinquent Loan Current
• Credit Rating Protection
• A shift to a Fixed-Term Mortgage from an Adjustable-Rate Mortgage
A successful mortgage modification not only has the potential to benefit a homeowner, it can also benefit their lender as well, making it a win/win situation for both parties. A lender generally loses money – sometimes a large amount of money – on a foreclosure, meaning that the lender will generally work to avoid such a situation when possible. A lender stands to benefit more from a homeowner who is making payments, even at a modified or lower level, than from a foreclosure. Therefore, a successful mortgage modification can lead to a homeowner keeping his or her home in addition to the lender continuing to receive payment.
Follow the links below for more information about mortgage modification.
Answers to Questions About New Mortgage Modification Program – NY Times
U.S. Department of Housing and Urban Development (HUD)
Home Affordable Modification Program – Part of the U.S. Government’s Making Home Affordable Program
Brian F. LaBovick, Esq.
Esther Uria LaBovick, Esq.
Mark R. Hanson, Esq.
Scott R. Haft, Esq.
Joseph R. Fields Jr., Esq.
Marcie Dodson, J.D.