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Home Loan Modification  

With the current state of the economy in the United States today, thousands of people are struggling and falling behind on their mortgage payments.  The financial state of the country has forced lay-offs in many industries and businesses have tightened their belts and have cut way back on hiring.  This has put many Americans in a position where they are in need of home loan modification or in need of mortgage refinancing.   

You may have suffered an illness that has left you with high medical bills to pay.  You may have been a victim of the subprime mortgage that allowed people to purchase a home that was above their means.  Many such loans were written with a low rate that would increase after a period of time, or have a balloon payment of a large sum of money after a few years.  If you previously obtained an adjustable rate mortgage and are struggling to pay the higher monthly payments because your mortgage adjusted to a higher rate, the government has a home loan modification that may not only help to lower that monthly payment, but may help you to be able to stay in your home if foreclosure is imminent. 

The government home loan modification program helps homeowners convert an existing ARM into a fixed rate mortgage.  Basically, the way this loan modification program works is it allows you to do a mortgage refinance on a bad credit mortgage without requiring you to have a high credit score.  Credit scores of many people have fallen as people have encountered financial hardship and the inability to make their payments.  Home loan modification is much more complex than regular mortgage refinancing, but if you are in a position where foreclosure is a very real possibility, this may be the program that will help you keep your home and be able to afford your payments again.  This program was designed to help those who are losing their homes.   

The first requirement in order to be eligible for a home loan modification is actually that you must have missed some of your mortgage payments.   This helps prove that you are struggling financially.  If you are having trouble but haven't missed any payments yet, you may want to look into getting a bad credit mortgage refinance, which may be a better and easier option for you.  However, if you have missed payments and don't see much light at the end of the tunnel, you have a short amount of time to contact one of the government agencies that handles loan modification.   

The process in lengthy and the foreclosure process keeps rolling along while you are trying to push the modification process along.  So, you could still end up losing your home to foreclosure if things aren’t done quickly enough.   There are local and classes to help you understand how the modification process works and determine whether or not you meet the guidelines for the program.  Working with a loan officer who is experienced with loan modification will help you avoid pitfalls or problems along the way.