Loan Modification Programs Not Always The Solution

The rate of foreclosures continue to climb despite government efforts to provide homeowners with help to stay in their homes. You need only pick up a newspaper or surf the Internet to find hundreds if not thousands of stories with the same theme. Struggling homeowners who are fearful of losing their home due to a financial hardship, work with their loan servicer to find a more affordable payment through a loan modification.

One would think that with all the resources made available from the government more of these mortgages would be modified, yet every day more and more homeowners are finding themselves in a frustrating battle with their loan servicer. After sending in all the required information, homeowners claim the information is either lost or later told the application is incomplete due missing information. Unfortunately, it can take months or sometimes over a year before the loan servicer, who has required the homeowner to jump through hoops, announces the loan modification has been denied. This is often after the homeowner has made required payments and followed all of the guidelines set forth by the loan servicer.

For this reason, homeowners today are cautioned to consider all of their options before setting their hopes on a modified loan from the bank. Here are a few tips that might help if you are in a financial hardship and have fallen behind on your mortgage payments.

• Contact your lender- Yes, despite the horror stories circulating in the media, contacting your lender is still the first step if you have fallen behind. If only to find out what options are being offered. Without this initial contact, foreclosure actions will surely commence in a shorter period of time.

• Loan modification program- If you are told you qualify for a loan modification, go ahead and provide the information requested. It is important from the very first call or contact with the lender to document each and every correspondence. You will undoubtedly need these notes for reference throughout the process, according to homeowners who have already been down this road.

• Do not become lax- During the loan modification process, you may be tempted to become complacent, assuming the application will be approved and all will be well. This is not the case. You should do everything possible during this period to continue making payments and if possible apply money to any past due payments.

• Research options- Get involved in saving your home by learning about all the possible options or programs available to struggling homeowners. If you find at the end of the loan modification process that you have been denied, your past due amount will be due immediately or foreclosure will begin. If you have researched all options, you could find additional assistance that can slow or halt this process.

Contrary to what the banks would like you to believe, the only person who is really interested in keeping you in your house….is you. Therefore it is your responsibility to be proactive and aggressive in finding any assistance available to help you through this financial hardship. Loan modifications can help homeowners stay in their home, however getting through the process and being approved is much harder than most homeowners believe.