Loan Modification Help For Homeowners and Lender Benefits

Loan modifications are geared to make the homeowner's mortgage loan more affordable, generally by decreasing the mortgage rate, furthering the loan term and, in rare cases, by reducing the principal mortgage balance. Loan modifications are not mortgages to be refinanced, that repay the current mortgage with a new mortgage, rather they must have the current lender's approval.

With the Obama Administration's "Making Home Affordable" program, a new second mortgage program allows borrowers whose first mortgages are modified to automatically have payments reduced on their second liens as well, provided the primary and second-mortgage lenders each is associated in the program. There are twelve mortgage lenders who are actively involved in the program. Many large banks, including Bank of America, Chase, Wells Fargo and others.

Some guidelines for homeowners seeking to qualify and have their first home loan modified are: have the house as their primary residence; have an unpaid principal mortgage balance that is less than $729,750; have a mortgage loan that was active before Jan. 1, 2009;
have a mortgage payment that is greater than 31 percent of their gross monthly income; have a mortgage payment that is unaffordable, possibly associated to a dramatic change in their income or expenses.

With the new second mortgage plan, in addition to lowering the payment, lenders can also pick to forgive a borrower's second loan in exchange for a one-time bulk payment from the government.

Short-sale incentives for lenders were some of the most current details to the Obama administration's housing rescue programs. In a short sale, the lender closes the borrower's mortgage account in exchange for whatever sale price,normally the current market value, the homeowner can receive. However, the difference that is forgiven is sometimes defined as income which the selling homeowner may be taxed. It's suggested you consult with a tax advisor on the transaction.

The new short sale incentive gives lenders a $1,000 payment from the U.S. Treasury Department and the Department of Housing and Urban Development for allowing the homeowner to sell the home for less than the mortgage amount owed and for accepting the sales proceeds as full repayment. In addition, if the owner simply wants to give back the deed to the lender, called a deed-in-lieu, lenders can get back $1,000 instead of going through an expensive foreclosure. A very helpful way to stop the red tape of second mortgage lenders from blocking the transaction, the Treasury Department will pay second lien holders up to $1,000 to release any claims in short sales or deed-in-lieu transactions.

Homeowners interested in a short sale or using a Loan Modification program if they are behind on their payments or have a financial hardship can You can apply for a Mortgage Modification with a Real Estate Lawyer by visiting http://www.OCRealEstateLawyer.net website to have experienced paralegals, debt negotiators supervised by Attorneys who know this business