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Loan Modifications for People Who Are NOT Behind on Payments

By
Real Estate Agent with William Raveis Real Estate

 

  We hear a lot in the news about programs to help homeowners who have fallen behind on their mortgages.  Sometimes  it's from job loss, sometimes it's because the adjustable loan just adjusted and the payment has gone up dramatically. Believe it or not, the banks do not want to own any more foreclosures.  They'd much prefer to have homeowners stay in their homes and make the payments. 

Some banks are offering Loan Modifications to help homeowners back in line - either in interest or principal adjustments. The thing is that most of what you hear about is debt relief for folks that are imminently awaiting foreclosure

What about the multitude of people who are "upside down" (the value of the home has depreciated to less than what they owe)  but are diligently making their payments each month? Is there any help for these folks? Can you get relief on your mortgage even if you pay on time?  It only seems fair, right?  Why should you not be able to avail yourself of assistance because you haven't fallen behind? Is there such a program? 

The answer is a definitive "maybe!" - and might be worth checking out. There are a few avenues that might prove fruitful. Both of these can researched by contacting your lender.

Directly from your Lender

If your mortgage is backed by Fannie Mae or Freddie Mac, there is a program available to lenders enabling them to work with borrowers on loan modifications that will bring the principal amount of the mortgage within the confines of the current market value of the home. It is up to the individual lenders to utilize this program or not and to set the basic eligibility. There is no assurance that your lender will do this but - some are doing it and it could be worth your time to contact your lender to find out how this might apply to you.

Another option is PMI

The second option that could come into play depends on whether or not you have PMI (Private Mortgage Insurance) on your loan. It also depends on which PMI company your lender uses.  Some PMI companies are offering homeowners a program that will help them out in a situation where they owe more than the value of their home.  There are a few different ways they can help but - again, it will depend on the specific PMI company that you have.  You can find this information out by contacting your lender.

Federal Government Assistance

There may also be some relief available from the Federal Government as part of the "Road To Stability" plan.  You can find out more about this by going to their website.

Please keep in mind that eligibility for any of these assistance programs can only be determined at the individual level. It never hurts to investigate though.

 

 

 

 

 

 

 

 

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