| In our current economy, many homeowners have | | | | government provided assisting program HAMP |
| needed to re-assay their current financial stability | | | | and then contact their lender and negotiate terms. |
| reducing expenditures here, paying less there in | | | | HAMP, or Obama's "Home Affordable Modification |
| order to keep current with their monthly | | | | Program" assists homeowners with mortgages |
| mortgage payments. This could have been | | | | held by Fannie Mae or Freddie Mac. This was |
| induced by multiple reasons: spouse lost job which | | | | introduced to assist responsible borrowers who |
| paid the mortgage; or instead of being laid-off | | | | have fallen on hard times and here are some of |
| spouse accepted a principal reduction in salary | | | | the main requirements: |
| earnings each year, or simply your ARM | | | | |
| (Adjustable Rate Mortgage) note rate has | | | | 1. House must be owner occupied |
| increased beyond your ability to make payments, | | | | 2. Front-end debt to income ratio typically is not |
| etc... Either way due to the present circumstances | | | | less than 31%. |
| borrowers are unable able to afford their monthly | | | | 3. The loan balance cannot exceed $729,750 |
| mortgage payment leading to a potential | | | | 4. Homeowner must be willing to remain in the |
| downward spiral toward home foreclosure. | | | | home |
| In attempts to avoid home foreclosure | | | | The first step in applying for a modification is |
| homeowners are seeking loan modifications to | | | | writing an accurate financial hardship letter. What |
| reduce their monthly mortgage payment. | | | | is a hardship letter? This is homeowners potential |
| Mortgage Servicers are able to accomplish this via | | | | to explain the reasons why you would qualify for |
| a variety ways. One option maybe decreasing the | | | | a modification and why the Mortgage Servicer |
| note rate or interest rate of your loan. Another | | | | should extend this available option which could |
| option, could be just modifying your ARM to a | | | | mean considerable financial loss for the principle |
| lower fixed rate. Option three could be a | | | | lender and it's investors. The necessity of being |
| combination of lowering your interest rate while | | | | accurate with language that is clear, concise and |
| the lender writes-down their expected principal | | | | compelling will be preferable without embellishing |
| gains, although very rare. Either way, these are | | | | your current situation is very important. |
| just a few options available to borrowers in | | | | From here two available options remain, either |
| attempting to modify loan by reducing monthly | | | | contacting your lender personally or working with |
| payment. | | | | a mortgage professional who has experience in |
| As the title suggest, knowledge is power, and | | | | and successfully obtaining modifications for |
| knowledge regarding the requirements which | | | | borrowers. If you decide to move forward with |
| qualify homeowners for eligibility for a modification | | | | the application yourself, make sure your |
| will increase the likelihood of succeeding in this | | | | application is accurate and verifiable. Any false or |
| adventure. Why? As with any program if you are | | | | misrepresented information will result in rejecting |
| not eligible the reward will not be provided. | | | | your proposal, which will delay the application |
| Homeowners can either traditionally follow the | | | | process. |
| pattern of contacting the lender personally in | | | | The decision in either using your own knowledge |
| attempting the process of applying for the | | | | or using the experience and knowledge of trained |
| modification, or they can research the | | | | mortgage professionals will be entirely up to you. |