Home Loan Modification Myths Circulating During This Time of Economical Difficulty

Everyone is talking about home loan modification. Even though this has always been a option for homeowners struggling to pay their mortgages, the process of renegotiating the terms of your loan and having it adjusted by the bank or lending institution, is much more commonplace today. Even so, there are still many myths and misconceptions about home loan modification.

Since the President's new Making Home Affordable (MHA) plan has been introduced, there is now an understandable series of steps lenders must follow before granting home modification loans. There is $75 billion set aside for the Homeowner Stability Initiative that is to be used for loan modifications between March 4, 2009 and December 31, 2012

Lenders participating in this program are paid money to adjust your loan and this incentive makes a modified loan a much better deal than foreclosure or something else. Through this method, the MHA hopes to help 4-5 million homeowners get back on their feet financially and keep their homes.

There is still a lot of false information about the MHA plan. Some people think that participation is mandatory and lenders are being forced into the plan. This is not true, there is a clean set of procedures for modifying loans and the plan does give lenders incentives to work out modifications, but no lender must participate.

The bank has to decide if a modified loan will be more profitable than foreclosing and they will choose the option that gives them the most profit. Foreclosure is a very expensive, lengthy, unprofitable process for lenders. With the recent incentive payments offered by the MHA plan, lenders usually decide that they would rather modify a loan than proceed with foreclosure.

Another common misunderstanding is that the Homeowner Stability Initiative plan will help speculators and house flippers. This is also false. To qualify for a loan modification in the MHA plan, the homeowner must be living in the home to which the mortgage applies. This will be checked. Vacant, condemned, investment properties and second homes are not eligible.

There are a lot of home loan modification myths circulating during this time of economical difficulty. The MHA plan is new and people have yet to learn about it. Learn the facts and understand this loan modification plan.

Learn all you can about home loan modifications and don't let false information keep you from applying for this new program. You can avoid foreclosure and lower your mortgage payments

What to do about my mortgage?
About five years ago I got purchased a condo when the market was at its peak. Unfortunately I got involved with a mortgage that is interest only. To make a long story short, I got laid off from my job. I ended up taking the first thing I can get which is less then half of what I was getting paid in my previous job. I applied for the ?Home Modification? refinancing program, and they put me though a trial period for three months. The payment was reduced a couple hundred dollars, and still waiting in line to see if I even qualify to keep the loan. (All of the balance is being put on the back end, until they finalize the modification.) I was told by the CSR that they might convert my current loan to a 40 year loan. Unfortunately there is no time frame when this is going to happen. In the meanwhile I pay a monthly condo association fee of $250 and escalating. It?s becoming very difficult to pay with the current income I am making. I would really want to go back to school, and further my education so I don?t have to work two jobs to support myself for the rest of my life. I cut down on a lot of extras already, I hardly go out anymore. I buy the bare minimum of food, and necessities already. I feel like I am stuck between a hard spot and a stone at the moment. Should I give up, and short sale or foreclose?

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home modification money loss?
We paid a company $1400 to help us get our home loan modified. We researched the company's through the BBB and found one with great reviews. I have not heard from them in a while; so I called today only to find out that the company shut down and is not refunding money. Is there anything I can do to get the money back?

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Aurora Loan Services any good experiences on Home Modifications?
I have Aurora Loan Services, and I am behind by two months here in California, they Modified my Loan, but instead of my payment going down, it went UP! I can make my payments on time now, but I am still 2 months behind, and I'm really scared with Aurora, because they don't speak to me honestly. I get different versions, from different Reps. I get calls from different Reps, from different Home Mod companies, but most have been scams.. I don't have an FHA loan or anything like that.. But I don't want to lose my home on a technicality, they have classified my mortgage as default now.. but they don't want to work anything out.. Any advice? I make $60k a year gross, and I work for a Private College in Los Angeles, I asked work for an advance, but they basically said NO, even though I brought in close to 2.5 million in sales last year..

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