Loan Modification – How To Avoid Foreclosing On Your Home

There is a terrible crisis looming, which affects 30 million home owners in the USA. Increasing numbers of people are losing their jobs, or having their salaries reduced. Increasing numbers of home-owners are, through no fault of their own, falling late with their credit card, mortgage or car payments. These people are in imminent danger of defaulting on their mortgage loan and seeing their house suffer foreclosure. But there is a solution, and many home-owners are not even aware of this as an option: it’s known as loan modification – sometimes called loan mod.

Mortgage loan modification does not involve re-financing, so there is no credit check needed. It isn’t debt consolidation. It’s renegotiating the existing loan to affect a reduction in interest rate and, under special circumstances, a reduction in loan principal as well. Without extending the term of the loan. A new, lower, monthly payment is achieved which is affordable to the home owner. Loan modification is a true win-win for all parties concerned. To the home-owner it can mean the difference between losing and keeping their property. To the banks, it might mean the difference between staying afloat or going under.

There’s no reason why home owners can’t arrange their own loan modification by contacting the loss mitigation department at their bank. But it is not recommended – the banks will usually offer only an insignificant reduction in interest, or no reduction at all. It’s far better to engage the services of an established loan modification firm, which has its own team of dedicated loan modification attorneys, who do nothing other than speak with banks all day long and know how to achieve a telling lowering. Doing it oneself is similar to representing yourself in a court of law – seriously not recommended. An experienced mortgage loan modification firm can negotiate a 30 – 50% reduction in interest rate without an extension to the length of the loan. It is well worth the fee they may charge to achieve this.

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