Recent Government Legislation Gives Homeowners A Chance To Lower Mortgage Payments, Stop Foreclosure and Get Rid Of Late Fees and Back Payments!

Recently, there was legislation passed mandating that banks modify the mortgages of homeowners struggling to make payments on their home loans REGARDLESS of whether they were delinquent or currently had a notice of default.

Furthermore, this legislation states that any borrower who qualifies and responds to the servicer will be given the opportunity to provide the required information for consideration. If necessary, the scheduling of a foreclosure sale will be suspended.

So, if you’re struggling to make your home mortgage payments, and fear that you’re headed down foreclosure road, get started now!

Loan modifications can take up to 12 weeks to complete in some cases, so the sooner you act, the sooner your payments drop.

There has been a lot of talk about banks and private servicing companies requiring that you be late on your payments to be eligible for a loan modification. To clear up the confusion, let me just say that simply isn’t the case. There is one caveat to that, however.

President Obama has recently released an incentive for banks willing to help homeowners in need but not delinquent. This means that many homeowners will be able to obtain a loan modification even if they’re not late on their payments.

The real world scenario on that, however, is that many banks are still not complying, and even when they do, they are being very sparse on the amount that they will modify a payment.

Going late on your mortgage to obtain a loan modification is never recommended (or it shouldn’t be at least), but often times borrowers that are the most likely to default (i.e. those that are late already) get the attention of the banks more readily.

Many people want to know if you can refinance on a loan modification. The important thing to know here, is that a refinance and a loan modification essentially do the same thing. The difference between a refinance and a loan modification is that in a refinance you can pull equity out of your home, and in a loan modification you have no equity to pull.

With that said, most times there are stipulations that go along with a  loan modification that prohibit a refinance afterward for a period of 24 months. So, as long as you wait 2 years after your loan modification, there is nothing stopping you from refinancing.

As always, please check your loan modification documents, however, because not all loan modifications are created equal and sometimes the period before a refinance is extended to 5 years, and other times it’s not there at all.