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Will a loan modification stop foreclosure?

By
Services for Real Estate Pros with LoanSafe.org

Many homeowners in the United States are having difficulties paying their mortgage due to current financial struggles they are facing. One of the main questions they ask is "Is there someway to stop the foreclosure proceedings?" Yes! With a loan modification you may be able to bring your defaulting mortgage current once again and possibly achieve a lower monthly payment as well. If you can afford your home and just not the current loan, you may qualify for a loan modification. A loan modification will give you a fresh start and give you a chance to keep the home for you and your family.


Before you attempt to apply for a loan modification you must provide a hardship to your lender as a reason why you are currently having difficulties paying your monthly payments. You will be required to write a detailed letter explaining the reasons to why you are facing these difficulties. Be honest as possible when writing the hardship letter because your lender is going to ask for all of your financial information including pay stubs, bank statements, tax returns, etc. Your lender will also pull a credit report to see all of your other debts. Some good examples of hardships lenders are considering are; incarceration, illness, loss of job, reduced income, death in family, medical bills, and major damage to your property.


Once you have prepared your hardship and financial information give the representative a brief description of your hardship and let them know you want to apply for a loan modification. Something everyone needs to know is that it is very important to be polite, patient, but firm at the same time. Remember the lender is the one providing you with assistance and they also have many other modifications in process as well. Every modification is on a case-by-case basis and can easily take four to six months for an answer. Also take in thought that modifications are not guaranteed and you may have to find another way to avoid foreclosure. But if you are successful and achieve a loan modification you will bring your loan current and begin with a fresh start. Hopefully with a lower interest rate and monthly payment as well!

read more at LoanSafe.org

 

Christine Hynes
American Capital Corporation - Laguna Beach, CA
Orange County Senior Loan Consultant

Good info Moe, people need to know that if they apply for a HAMP loan modification, HAMP guidelines require banks to stop the foreclosure process while they are going through the loan modification.

May 28, 2010 11:46 AM
Moe Bedard
LoanSafe.org - Carlsbad, CA

true, very true. Please help and spread this information

thank you for the comment

May 31, 2010 05:28 AM
Anonymous
Susan Topello

Good article!  The advice is accurate.. a hardship letter, financials, credit reports, NPV (net present value), etc must be provided to the bank if you want any chance of stopping a foreclosure.  The only problem is that if you've already got a foreclosure date set, like I did, you don't have much time to get paperwork and reports together and submitted.  I found a company through a number of resources (AOL's housing watch, Forbes, NBC news) that apparently helps with HAMP and loan modification cases such as these....  I used their services to stop my foreclosure as well as obtain a great temporary modification (hoping and praying that it stays and becomes permanent!)  But, for a free company that provides HAMP assistance and free online help, it's DEFINITELY WORTH THE 15 MINUTES!  I hope anyone looking for help tries www.freehampreport.com like I did.

Jun 10, 2010 08:42 AM
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