Loan modification help is available to troubled homeowers as the Federal government moves to offering as much as $500 billion in loan guarantees.  The idea, outlined by the FDIC Chairman Sheila Bair, is to help millions of homeowners avert foreclosure by offering loan guarantees and other credit incentives to banks who offer loan modifications to their borrowers. 

Defaulting homeowners have complained that loan modification help has been slow in coming.  Most lenders have been hesitant to proactively offer any type of far reaching loan workout programs to homeowners facing unaffordable house payments.  The loan servicing companies who deal directly with the borrowers fear repercussions from the investors who own the loans if losses are incurred by a loan modification.  However, the cost of foreclosure would be offset by the Federal loan guarantee offering and therefore induce lenders to instead offer a loan modification to borrowers facing foreclosure.

Loan modification help could come in the form of standardized loan workouts similar to the loan modification program offered by Countrywide owner, Bank of America.  Details and launch date are yet to be announced, however banks who meet the new loan modification standards would be given a federal guarantee on the new, modified loan.  This is a big incentive for banks to offer standardized and systematic loan modifications to help homeowners avert foreclosure.

Loan modification help could include some or all of the following options:

• Interest rates reduced to as low as 3%
• Longer loan terms
• Forgiveness of principle to reflect 95% of homes current value
• Waive fees and penalties
• Free to homeowners facing financial difficulty

The FDIC would fund the Federal loan guarantees with approximately $40 billion from the $700 billion financial bailout package the Congress approved earlier.  That money would go toward insuring and covering future losses on loans that are modified according to the standards to be established by the Federal government.  Chairman Sheila Bair has advocated  long term, sustainable loan modifications as a solution to the ongoing mortgage crisis.

The willingness by the Federal government to offer loan guarantees to lenders who offer loan modifications signals a move toward significant loan modification help for desperate homeowners across the country.  The avalanche of foreclosures continues to place a downward pressure on the housing market, making recovery and stabilization extremely difficult.

Struggling homeowners facing unaffordable monthly loan payments can begin to get the information they need to obtain loan modification help.  Borrowers can learn about the loan modfication process so they will be prepared and know how to qualify for a loan modification.  Not all borrowers will qualify for these programs, so it is important to learn how to complete the loan modification forms properly to increase the chance of approval.

One of the most up to date and unbiased sources of loan modification information is The Complete Loan Modfication Guide.  This is a low cost, easy to read handbook that you can order and download right online.  The Complete Loan Modification Guide will provide you with everything you need to prepare a professional and acceptable loan modification application.  You will receive all of the requird loan modification forms, along with detailed instructions on how to complete them properly.  You will learn about debt ratio, help to write an effective hardship letter, step by step instructions for completing your financial statements, your legal rights and much more.

Get the help you need, order and download The Complete Loan Modification Guide today and get started on the path to financial security again.