Home owners are fighting hard to keep their home out of foreclosure. Many of them who attempted to get their loan modifications either got long waits to get their case reviewed or no response at all.
Although Obama administration is leaning on mortgage services to step up modifications, there are lots of thing to do. Government’s program is helping only a tiny fraction of struggling homeowners. As of July, only 9 percent of eligible borrowers had seen their mortgage payments reduced with modified loans, the report said.
In a letter to mortgage companies, Treasury Secretary Timothy Geithner and Shaun Donovan, secretary for Housing and Urban Development, wrote, “Much more progress is needed.” “There appears to be substantial variation among servicers in performance and borrower experience, as well as inconsistent results in converting trial modification offers into actual trial modifications.”
Although mortgage services companies are saying that they are working out on more loan modifications, the fact is that they are overwhelmed by the number of homeowners all wanting help at the same time.
Some house owners are facing confusion in understanding difference between loan modification and loan refinancing. A loan modification is different from a traditional mortgage refinancing. When you refinance, you sign a new contract for a new loan. A loan modification involves changing the existing loan by lengthening its term or lowering the interest rate so that you can continue to afford your mortgage payment. Homeowners may be eligible for a loan modification if they have a mortgage payment greater than 31 percent of their monthly gross income and can document that a financial hardship has made the payment unaffordable.
Tags: financial protection, foreclosure, homeowners, loan, Loan modification, mortgage, mortgage modification
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