The Most Important Things You Need To Know About Loan Modification

With the number of foreclosures on a step rise many how owners want to know about the various options available that can help them to save their homes. One of the most potent and effective solutions to prevent foreclosure is home loan modification.

Mortgage modification involves a permanent change in the loan terms of the borrower. This can include a reduction in the interest rate, waving off penalties or increasing the loan duration or a combination of such steps that will reduce the monthly mortgage payment making it more affordable and manageable.

You can talk to your mortgage program officer, to an attorney or to a company that offers to negotiate for a home loan modification with the lending institution on your behalf. To qualify for mortgage modification you need to have a valid and legitimate reason which has caused a drastic reduction in your income. Such reasons can include divorce, work related injury, chronic illness, unemployment, death in the family etc.

If you are wondering why would a bank be interested in offering a home loan modification; the answer is very simple they have to spend quite a bit on foreclosure procedures and given the sub prime crisis and the plunging real estate market there simply aren’t any buyers in the market. So when it actually comes to a foreclosure the bank would certainly choose a mortgage modification over it.

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Countrywide Loan Modification – Obama Wants Countrywide to Modify Mortgages

If you are over your head in your Countrywide home mortgage, a Countrywide Loan Modification would fit the bill: The Home Stimulus bill, that is. President Obama has signed a bill that allocates 75 billion dollars to encourage approved lenders to rework loans for homeowners who are facing imminent foreclosure. Countrywide is an approved lender on this list, fortunately for you.

President Obama and his administration want Countrywide to modify your mortgage so much that the Treasury Department is giving them $1000 for every existing loan that they rework. Their goal in the new loan is to achieve a lower house payment that is less than 31% of the homeowner’s gross monthly income.

But, that isn’t all. President Obama has asked that the approved lenders actually expand their staff to accommodate homeowners faster and more efficiently. If you qualify, he wants you to be sure and be served, allowing you to stay in your home.

Countrywide has a store of resources that the government has put at their disposal through this bill to help you straighten up your mortgage mess. They can even forgive those mounting late fees. And, consequently, if you are not just late, but in default on your mortgage, it will not prevent your approval for this federal program. If you are in default, you probably need a loan modification more than anyone, because it is almost impossible to accumulate the required lump sum necessary to bring the loan up to date without this program.

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Shade Tree and Consumer Advocacy Group- Teaming Up for the Community

This is the time of year where we all like to think a little further outside of ourselves than we may do throughout the rest of the year. Whether just dropping our spare change into a Salvation Army bucket or donating to charities in the names of our loved ones, we all get a bit more generous around the holidays. However, for many, such as Shade Tree Shelter and Kristy Sinsara of the Consumer Advocacy Group, giving isn’t a once a year event. These organization work year-round to improve their communities and to build a better life for those in need.

Kristy Sinsara and the Consumer Advocacy Group have been diligent in their efforts to help distressed homeowners, suffering under the burden of ballooning interest rates on sub-prime mortgage loans. Kristy Sinsara has also been very vocal, both in Washington and at home in calling out lenders for their misuse of TARP funds and for their continued disregard for the American public, specifically those homeowners most affected by the unscrupulous lending practices of big money lenders like Bank of America, the now defunct Countrywide Financial Corp. (bought up by B of A) and others.

Kristy Sinsara’s dedication to the community reaches beyond just helping those in danger of losing their homes. She also cares deeply for those who find themselves without shelter for reasons other than mortgage issues. The Shade Tree Shelter has long been an organization that Kristy Sinsara has held in high regard. The Shade Tree Shelter takes in those who are victims of domestic violence.
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5 criteria to get your Home Loan Mortgage approved

Why do some people get their home loan mortgages approved in a breeze while others struggle through with hiccups? What are the differentiating factors between one application and another? What do lenders look at when they evaluate you?

In reality, getting your home mortgage approved depends on how your background matches the list of criteria set forth by the lender. Although these rules that they have are not always entirely hard and fast, the loan application officer does not stray too far away the guidelines he or she has been entrusted with. Needless to say, applicants should at best present themselves as creditworthy creditors and have the adequate documented records as proof of this.

Believe or not, lenders have a scoring system for aspects of your background that they are evaluating. The following are areas in which you will be scrutinized on:

1.Employment History You must have been in employment for not less than 2 consecutive years within the same industry. This shows that you have the capability to be sustained in a permanent position, and do not hop from one job to another. Lenders look for stability and consistency as best they can, and your employment history is a good basis for them to evaluate your capability to generate income to finance your mortgage.

2.Credit History The next indicator of your credit-worthiness is your short-term debt, a.k.a. your credit card bills. It’s ok to have some debt on your credit card, but you must show a history of on-time payments. Apart from that, too much debt on credit cards with credit lines fully utilized shows the possible inability to pay for debt. Therefore, at least six months before applying for a loan, it would be best to clean up your short term debt as much as possible.

3. Outstanding Liabilities The size of your income dictates the amount of liability you can support. As a rule of thumb, lenders stipulate that a person’s total monthly payments for liabilities should not exceed 42% of his or her monthly earnings. With this, total liabilities include credit card debt, car loans, student loans, existing mortgages or child support collectively. This means that in order to qualify for your home loan mortgage, you need to reduce your monthly repayments on liabilities to the point which is acceptable by the lender.

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