A mortgage loan modification is basically an adjustment that is made on the terms governing your mortgage loan which is done by the lender. Such changes can be on the loan amount, the interest rate or the type of loan that you have. For example, your variable rate mortgage loan can be changed to a fixed rate mortgage loan. The primary reason for having a mortgage loan modification is to keep your home with affordable payments, which can change due to modifications in the adjustable rate mortgage, changes in the employment situation and the effect that a foreclosure will have on the credit profile of a lender.
If your home is about to be foreclosed by a lender because of one or more of the above reasons, you can turn to some government programs that can help you with your mortgage loan modification. Under the continuing efforts of the Obama plan against home foreclosure, you can be eligible for a reduced mortgage interest of as low as two percent that will go for five years. You will be given a temporary mortgage loan modification that will become permanent if you complete the paperwork required and make three payments on time. The paperwork includes the usual hardship letter and proof of income. There is also the Home Affordable Modification Program, which can make a substantial reduction on your monthly mortgage payment. To qualify for loan modification you have to meet the following conditions:
* You must be the owner of the home that is about to be foreclosed. It must be an occupied and single family property. There can be one to four units to a property which includes cooperative, condominium and manufactured homes that are fixed to a foundation and treated by state law as real property
* The property should also be your primary place of residence as validated by your credit report, tax return and utility bills
* The property is not owned by an investor
* The property is not condemned or vacant
* Should there be a bankruptcy, you are not automatically eliminated for a mortgage loan modification consideration
* If you are in an active legal proceedings for the mortgage loan, you can still qualify for a mortgage loan modification without waiving your rights under the law
* If you have unpaid principal balance for first lien loans before the capitalization of arrears, it should be less than or equal to 729, 750 dollars for one unit, 934,200 for two units, 1,129,250 for three units, and 1,403,400 for four units. The figures are all in US dollars.
Aside from government assistance to your mortgage loan modification, there are do it yourself loan modification methods that you can do by yourself to save on the cost that you will have to pay to loan modification companies. Your fight for mortgage loan modification is further helped by the California Loan Modification which focuses on lowering mortgage payments. But the law is not a "cure all" and it is not uncommon for mortgage loan modification applications to be denied, to help you with the entire loan modification process, prevent lenders from taking advantage of you and to avoid loan modification scams, you must have the services of a good lawyer. There are violations that may require a forensic audit to detect, but these are usually identified at once by an experience lawyer, making his services essential in your fight to keep your home.
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