Facts About Loan Modification
Update November 2010 - HAMP Failing To Prevent Delinquency
Every homeowner in distress wants one and believes they will get one. Who can blame them. The truth is that effective loan modification is not a reality. So few homeowners have obtained effective relief that for all practical purposes loan modification should be considered a myth. Yes, some homeowners do obtain a beneficial result but the statistics paint a bleak picture for anyone relying upon that result. According to the U.S. Treasury Department only about 9% of the homeowners that need mortgage relief are getting it through loan modification (with Making Home Affordable or non-government modifications). Of the 1,214,085 trial loan modifications started under the MHA program only 299,092 have resulted in a permanent loan modification. THAT IS LESS THAN 1 IN 4! The results are even worse if we look at loan modification in general (government & non-government), fewer than 1 in 10 homeowners in need have obtained effective relief.
So why isn’t loan modification working? In simple terms, most homeowners cannot get one and even when they beat the odds and obtain a loan modification it does not effectively solve the two most important issues for homeowners in need:
Reduced Income & Negative Equity (Underwater)
Most distressed homeowners have experienced a significant reduction in household income and the value of their home has declined substantially so that they owe more than their home is worth. Less income to survive with and little or no equity left to fight for. Loan modification, in most cases, does not reduce the loan balance and does not reduce monthly payments enough to be effective. Sadly, many loan modifications actually result in an increased monthly payment! 3 - 8 months of work to get a loan modification that results in a higher monthly payment! Does this sound like effective relief?
If loan modifications were working as well as everyone hoped then why are so many homeowner’s re-defaulting?
Even for the fortunate few who have had their payments reduced by more than 20% the re-default rate is over 40%. We understand and empathize with a homeowner’s desire to keep their home. Short Sale may or may not be the best option available to you. Given the disturbing facts about loan modification every distressed homeowner should look at all of their options and formulate a contingency plan before it is too late.
You Have Options, We Can Help.
Facing Foreclosure Is Hard. We know that. The stress and worry may feel insurmountable. It’s probably something you would prefer to and have been ignoring.The keys to navigating through mortgage hardship are knowledge and acting upon that knowledge before your options are eliminated.
Don't Let Time Run Out. Let us do our part. As distressed property and short sale specialists we are skilled at managing your options within all stages of foreclosure. Our business is helping families to avoid foreclosure and the consequences associated with it. The simple secret to avoiding foreclosure - Get Started Now! The sooner you research your options the better.
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Get Started Now. Learn about all of your options for avoiding foreclosure. We have presented a great deal of information here on our website. We urge you to learn as much as you can about avoiding foreclosure and short sales. When you have a question or you are ready for a confidential consultation we are standing by.