If you can no longer make
your mortgage
payments
but you don’t want to give up your house, a loan modification may
be a viable solution. Under the government’s Home Affordable
Modification Program or HAMP, you can request your lender to
restructure your loan so you’ll end up paying smaller monthly
installments.
When applying for this
program, however, time will not be on your side. To begin with, banks
drag their feet when it comes to approving a modification request.
Though they’re legally mandated to respond within 30 days, they may
rule your application incomplete, meaning they can stretch the
process further than this limit.
You may also be asked to
undergo a three-month “trial payment period” before your
application is approved, wherein you will shell out a smaller amount
than your usual mortgage payments. There’s no “financial
forgiveness” during this phase, though—since you’re paying less
than your minimum obligation, you will continue to incur late fees
and the late payments will also be reported to credit bureaus.
If you do get approved,
the modified interest rate won’t be fixed. In fact, the government
is about to raise the rates this October, affecting those who got a
mortgage modification back in 2009.
Before taking advantage
of this program, homeowners are reminded to take note of the
disadvantages it has. To learn more about the intricacies of mortgage
modification, be sure to talk to a trusted foreclosure attorney.
0 comments:
Post a Comment