| Loan modifications are becoming more common place, | | | | see this program putting calm to the foreclosure storm. |
| but the process hasn't become any easier as | | | | The lenders that are participating in the Home |
| homeowners become frustrated as they still have a | | | | Affordable Program, have on their books about 84 |
| maze to navigate through with their lender. | | | | percent of homeowners that are late on their |
| While the foreclosure rate is on the increase, there are | | | | mortgage. But these lenders are still only helping less |
| an increasing number of homeowners that have been | | | | than 50 percent of their delinquent home owners, |
| able to avoid foreclosure by working out a loan | | | | which is an issue that needs to be addressed sooner |
| modification with their mortgage lender. | | | | than later. |
| Many homeowners are being offered the Making | | | | We have come a long way, since the problem that |
| Home Affordable loan modification program, as | | | | began around 2007, as most lenders weren't even |
| lenders are given financial incentives to offer them. | | | | offering loan modifications at that time, instead they |
| These government loan modification programs require | | | | were either just foreclosing or they would just defer |
| the lender to put the consumer on a three month trial | | | | the late payments by adding it into the loan amount. |
| period and if the consumer can make the trial | | | | This turned out to be nothing but failure as it didn't |
| payments on time, then in most cases the lenders will | | | | reduce the consumer's monthly payment, which is |
| approve the loan modification with an affordable | | | | what majority of home owners need. |
| payment. | | | | Now, the loan modifications done currently involve |
| Majority of the loan modifications done in today's | | | | interest rate reductions and reduced monthly payment, |
| market is under the Making Home Affordable | | | | extension of the loan terms from a 30 to a 40 year |
| Modification Program, which was developed by the | | | | loan and in very rare cases homeowners might see a |
| Obama administration. This program did not gain | | | | principal reduction. |
| traction as quick as the government had expected. | | | | Even with government interventions, there are still a lot |
| Currently there are over 400,000 home owners that | | | | of struggling homeowners that won't qualify for a loan |
| are enrolled in the 3 month trial period of the | | | | modification as the unemployment rate increases and |
| government program. Typically, the homeowner would | | | | the economy gets worst. The Making Home |
| be offered reduced payments for 3 months, and then | | | | Affordable Program can reduce the homeowner's |
| their lender will agree to a reduced interest rate and | | | | payment to 31 percent of their income, however with |
| lower payments for a minimum of 5 years. Some | | | | the home owners other debts such as car payments |
| homeowners are seeing interest rates as low as 2%. | | | | and credit cards, they are still having a hard time |
| This program has been assisting about 100,000 home | | | | making their monthly obligations. And if the home |
| owners nationwide since the month of June, which | | | | owner is unemployed, they can forget getting a loan |
| may seem like a lot but only accounts for about 15 | | | | modification; however some lenders will approve a |
| percent of homeowners that are late on their | | | | loan modification if the homeowner is receiving |
| mortgage payment. While we don't have the exact | | | | unemployment checks. |
| numbers for the each individual state, we can definitely | | | | |