Loan Modification

Stop Foreclosure with a Loan Modification

I found this article on government bailout for homeowners behind on their mortgage.  "The current foreclosure crisis continues to spiral out of control and our current foreclosure programs for dealing with this crisis are simply not getting the job done," Waters said .  In the begining of next year, mortgage payments for delinquent borrowers three months to one year late would be lowered to around one third of gross monthly income. Next year, mortgage rates might fall to 3% for four years, before rising at an yearly rate of 1 percentage point until rates hit the usual market rate. Mortgage terms could be apportioned to as long as 40 years.

Each loan modification will be apportioned to see what benefits avoiding foreclosure.

So congress, behaves to encourage independant leaders, the government would share up to 60% of the losses if a resident home owner ended up in default anyway. The risk of re-default had been one obstacle to getting lenders on board with systematic modification plans. This guarantee may help people who are in trouble. The Federal Loan Modification Bureau, Housing Finance Administration, a united states government agency regulating Fannie Mae and Freddie Mac, last July introduced a "streamlined modification program" that starts the cross over by Fannie or Freddie.

To qualify, borrowers must be 90 days or more behind on mortgage payments, demonstrate financial hardship and borrowers must not have declared bankruptcy.

A number of banks have also announced loan modification, including Citigroup , Bank of America  and JP Morgan Chase . Most of these mortgage modification programs stop the loss mitigation incurred at levels borrower can afford through lower interest rates, longer repayment schedules or reductions in loan balances. The recent laws passed by congress regarding loan modification, should help families with a pending foreclosure. Lenders are required to modify existing loans to 35% of gross income.