Loan Modification – Keep the Ball in Your Court
Increasing numbers of homeowners are taking advantage of loan modifications in the past few years. After the housing bubble burst the federal government introduced the Home Affordable Modification Program at the same time as the Home Affordable Refinance Program. In effect since 2009, HAMP has also spurred various lenders to institute their own loan modification programs for homeowners. Typically a lender that participates in HARP will also participate in HAMP and there are approximately 100 HARP/HAMP participating lenders.
Even without participation in HAMP we can negotiate a modification with your current lender. Many lenders have their own loan modification process available to homeowners they serve.
The payment is lowered in one of three methods or a mixture thereof.
- Lowering the Interest Rate – Today’s rates are at near record lows and we can help you get a new, lower rate.
- Modifying the Principal – Typically a lender will prefer using principal forbearance. We fight for our clients to avoid principal forbearance. The forbearance basically removes a portion of the principal and sets it aside. The payment is lowered because of the truncated principal. However, a balloon payment may be due in a few years. Principal reduction is much harder to accomplish and many times our clients will choose a short sale once the application is denied.
- Change the Term – The term is the duration of the loan. Many lenders may extend the term from 30 to 40 years for a lower payment. For some homeowners, converting from a 30 year to a 15 year may result in higher payments but a lower interest rate and a fully owned home in a shorter time is one advantage of such a shift. Typically our customers will convert to a longer term to lower the payments.
Upside Down CA has committed its staff to assisting you with a loan modification. Call us today at 916.442.6400.
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