A loan modification program that offers a reduction in the principal balance is kind of like Big Foot – we hear about it but no one has actually been able to prove it’s existence. Well, now the Feds are intervening to encourage loan modification programs that will offer principal reductions for borrowers who meet certain qualifications. Here is some important information for homeowners who now owe more than their home is worth and need help with a loan modification program.
The Fed has said that it will give priority to reducing the outstanding loan balance on any loan where the home’s value has decreased by 25% or more. That is reasonable, as many areas across the country have seen home values plummet 30% or more in the last year alone. To be eligible for this loan modification program featuring principal reduction, a homeowner must:
- Live in the home as their primary residence
- Be able to verify their income and meet approval guidelines
- Either be delinquent on their mortgage or prove that a trigger event, such as a rate reset or job loss, will cause a payment hardship.
President Obama’s new treasury secretary, Timothy Geithner said that the administration is working on a sweeping program to stablize the banking sector and to address the continuing flood of foreclosures. This loan modification program offering principal reductions to possibly hundreds of thousands of homeowners is one measure aimed at keeping borrowers in their homes by reducing the loan balance so that it more accurately reflects the homes true market value. Underwater homeowners need this type of loan modification option to entice them to stay in their home and keep making mortgage payments.
Principal reduction is just one loan modification option, others include a lower interest rate, longer loan term or a combination of all of these to arrive at an affordable and sustainable mortgage payment. Not all homeowners will qualify for this loan workout, however help is available for those borrowers who know how to get it. Homeowners who submit an accurate and acceptable loan modification application will be able to increase their chances of success with their lender and receive this type of a loan workout.
Get the help you need to understand how to apply and qualify for a loan modification program by ordering and downloading The Complete Loan Modification Guide. This is a low cost, easy to read handbook that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com