There are many legal techniques to Avoid Foreclosure. A loan modification is a written agreement between the borrower and the lender that permanently changes one or more of the original terms of your note to make the payments more affordable. A loan modification can be an effective legal strategy that will help you save your home from foreclosure.
1. The borrowers interest rate and/or term of loan is altered extending the numbers of years that must be repaid on the loan, in other words, the mortgage note itself is changed.
2. Common loan modifications include adding missed payments to the existing loan balance or making an adjustable-rate mortgage into a fixed-rate mortgage.
Disadvantages of a Loan Modification:
- There are lenders that will only work with borrowers that are 60-90 days behind, only giving the borrower a short window to negotiate a work out option. Once the mortgage is in default, the borrowers credit takes a hit and limits the borrowers options.
Loan Modification Example:
Linda makes $2000 a month as a bus driver. She qualified for a $1100 a month mortgage 3 years ago. Now that her mortgage has reset, her new payments are $1800 a month. She is no longer able to pay per mortgage payments, and has not paid the mortgage in 2 months. When Linda went through the steps as described in this book, reduced her spending, completed her budget and workout package and contacted the lender. The lender agreed to put the outstanding 2 months of mortgage payments on the back of her loan (A forbearance agreement) and has agreed to go back to the original payments and interest rate of $1100 a month (A modification agreement).
K. Patrice Williams has a BA in Economics as well as a law degree. She has successfully managed both residential and commercial multi-million dollar income producing assets and budgets for more than 10 years. As a 1st year law student, Patrice established a real estate development and consulting business and acquired over 30 rental properties. As the housing market values decreased- like millions of other Americans-her properties were negatively impacted by shifting ARM's, combined by a sluggish economy. Patrice has researched and personally implemented almost all of the pre-foreclosure techniques detailed in the book: “6 Simple Steps to Avoid Foreclosure". http://www.avoidforeclosuremanual.com