Loan Modification Still the Best Option for Avoiding Foreclosure

Loan Modification Still the Best Option for Avoiding Foreclosure
by: Bridget Toomey



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.

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About The Author
Bridget Toomey is a licensed real estate and loan modification consultant
in the state of California. Since the economic downturn in early 2007 she
has focused her time on assisting homeowners who have home loan
modification needs. To know more about her or if you have any questions,
please visithttp://www.loanmodificationfoundation.com