Modifying the terms on a mortgage loan! Not necessarily the principal balance, but the interest rate, and repayment schedule.
As reported by Ilyce Glink in her Real Estate Matters Column in the Chicago Tribune last week, some lawmakers feel this is just the tonic to get many distressed homeowners back on their feet in a troubled economy. Others feel it's just delaying an inevitable default by a financially-stressed homeowner by no more than a couple of months or so.
And, often times, loan mods take months for approval, and are often not approved. Even President Barack Obama is getting involved, asking Top U.S. Mortgage Lenders at recent meeting in Washington, to process and approve more loan modifications. The real question - how quickly can they turn them around?
According to recent statistics, roughly 9% of homeowners eligible for loan modification have had their loans modified on a temporary basis within the past 12 months. A far slimmer percentage have had permanent modifications to their existing mortgage loan.
As a general rule, loan modifications are considered temporary for three months, after which they can be made permanent.
But many who receive the Loan Modifications often fall into trouble within a year, and often default once again. Second time around, getting the lenders to agree to changing loan terms is far more difficult, if not impossible.
And those who lose their jobs, or their ability to repay - they are often rejected in the first place.
See our post today via BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO
Comments(7)