Loan Modification Still the Best Option for Avoiding Foreclosure

According to the latest data coming out of the US housing market, foreclosures have risen to record figures in the first quarter of 2009. More than 800,000 properties received a default or auction notice which is a 24% rise from last year. With industry watchers saying foreclosures have not peaked as yet in the nation, more and more lenders are likely to file foreclosure notices in the coming months.

The numbers are extremely disturbing especially since a number of steps had been announced by the Obama administration since the start of the year including the much awaited mortgage stimulus plan announced in March of this year. It would seem though that the measures so far have not been able to stem the number of foreclosures being filed every month.

The main concern for homeowners has been the uncertainty they face on the job front. Most mortgage borrowers feel that job security is the number one priority for them as without that, they would not be able to pay their monthly mortgages on time. A lot of people are ready to take a pay cut in their respective jobs rather than losing the job completely.

In the given scenario, most analysts believe that a home loan modification still remains the best option for homeowners in order to avoid foreclosure. As long as the homeowner still has a job, they should immediately contact a loan modification consultant and apply to get their mortgages modified before it is too late. If the homeowner has indeed been given a pay cut in their jobs, then it is even more important you apply for a loan modification as it would be easier to convince the banks about the difficulty to pay the monthly mortgage payments. At the same time, the fact that the homeowner still has a job, despite a pay cut, would mean the banks are more likely to modify their existing mortgages as the homeowner would be in a position to pay the monthly mortgages under the new payment plan.

The two main criteria for the mortgage lenders to approve a loan modification is whether there is a genuine difficulty or hardship in meeting the current payment plans and also the ability to pay the modified mortgage payment. Banks are extremely cautious to make sure the homeowners would be able to meet the new mortgage payments if they approve their loan modification application.

That is the reason why homeowners must make sure they apply right away especially if they are at risk of losing their jobs. Of course, in special cases, even borrowers who have lost their jobs and are collecting unemployment income can get their loan modified. For this you need to make sure you contact an experienced loan modification consultant who can negotiate with the bank on your behalf.

Since there are still some loan modification consultants who do not charge any upfront fees until your loan modification application is approved by your bank, you have nothing to lose by applying for a mortgage loan modification. The important thing though is you act fast if you really want to save your home from foreclosure.