Right now the country is seeing record high foreclosure rates. People across the nation are literally walking away from their homes and letting them go back to the bank. The important thing to realize here is that the banks do not want the homes back. Banks are not in the real estate business, they are in the banking business. Why is this important? If you are in a situation where your mortgage payments are too high due to a financial difficulty, an adjustable rate mortgage, or other reason, there are programs available to re-negotiate the terms of your existing loan to allow for you to stay in your home and get back on top of your home loan.
Loan Modification, Loss Mitigation and Home Loan workout programs are some options to consider. If you enroll in any of the aforementioned programs, you should be cautious about the company you work with. Make sure they’re reputable! A good company can make the programs incredibly successful in offering you financial relief.
Let’s say you have a home worth $340,000 and you have a $400,000 mortgage at 8%. If the home is foreclosed on, the bank has two options: auction it off, or re-list it. Either option could spell financial disaster for the bank, as doing so could add on another $60,000 in losses.
If the bank takes the loss by re-listing or auctioning off the home, they’re looking at a total loss of nearly $120,000. A modified mortgage loan of a 30 year fixed rate, and a lower interest rate of 5.25% would instead have the bank looking forward to almost $400,000 in interest payments over the life of the new loan. Talk about win/win!
Sometimes, homeowners can work out their own loan modification, but the default rate is often over 50%. Working with an attorney to formulate a modified loan reduces the default percentage to 5% or less. As you can imagine, banks prefer working with attorneys.
More often than not, if an attorney structures a loan modification for you and it doesn’t work out, their fee is refundable. You’re likely to see incredible results from restructured loans! Loan principal reductions, interest rate reductions, extended payment terms and lower monthly payments are all feasible when you modify you loan.
We’d be happy to give you some more information about our loan modification program, so give us a call! We can be reached at 1-888-282-1011. If you’re in a financial bind or just need a way out of your adjustable rate mortgage, let us see what we can do to help you!
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