Loan Modifications

Its not an easy subject.. but lets face facts.. the economy has changed.  Some have been more affected than others.  Some have had personal life changes, as well as financial economic changes, and due to the rise & adjustment of the real estate market, some families are having to decide whether or not they can keep their home.  

The good news is Obama has set aside $75 billion to assist with families in this situation.  This plan was developed to help these struggling families with a permanent, (or temporary, depending on the hardship), restructuring of their mortgage loan, which would help foreclosure rates & help homeowners be able to stay in their home.  This was also set up to help slow the decline in home values.  The majority of the foreclosures out there are because people were put into mortgages that they could not afford, add to that the recent layoffs, on top of the other unfortunate life circumstances.   http://www.hud.gov/offices/hsg/sfh/nsc/faqlm.cfm  Please reference this website for frequently asked questions.  

There are companies who specialize in loan modifications.  Now, some people may disagree with me, but I wasn't sure how this "specialist" can do something you or I can't.  If you qualify for this modification, then your bank will approve you.  Granted, each person's situation is going to be different than the next, but how can a 3rd party that costs a few thousand dollars get you such a good "deal" when there are non-profits who do it for free.   Also, if it costs a few thousand dollars, aren't you more in the hole than you were in the beginning? http://www.hopenow.com is a great reference site that you can use, for free!  HOPE NOW is an alliance between mortgage companies, investors, counselors, and other mortgage participants that will maximize outreach efforts to homeowners in distress.  

I've been party to a few loan modifications, and the results were very reasonable.  One home owner was able to negotiate a 3.25% interest rate for 3 years, (old rate was 6.25%), and there was a 3 month lapse where no payments were required.  I've also discussed with a past customer that they were able to negotiate a 5% FHA loan, which is down from their original 7%, and this is on a 30 year fixed.  Typically, and from what I've seen & heard, most of the mods are interest rate reductions.  The property has to be your primary residence.  I've heard of some principal reductions, but they are in the range of 10-15% of the principal balance, and in some areas in Jacksonville, depending on the property, this may not help enough.

Also, loan modifications may not be for everyone.  If you have questions, I welcome your phone calls.  Also, if you feel a loan mod is not right for you, and you want to explore your options of a short sale, I'd be more than happy to help you out with that as well :)