One excellent option might be a loan modification, which is designed to reduce the amount of your mortgage payment to no more than 31% of your gross income.
Unfortunately as of this time, it appears that most loan modifications are unsuccessful, with something less than 5% of all applicants successfully completing the loan modification program being reported by some analysts.
However, don’t be deterred! Perhaps you’ll be able to complete a loan modification and be able to remain in your home. According to some reports, the biggest issue with unsuccessful loan modifications is that homeowners do not adequately complete the necessary application, or do not provide sufficient documentation as required by the lender. Of course, there are also reports that lenders don’t recognize that a homeowner has completely required with all requirements. In any event, it doesn’t appear to be an easy or guaranteed process.
The first step is to determine whether or not your lender will change your existing loan to more favorably meet your financial requirements. This process is formally termed “loan modification.” Under the terms of the federal program, HAMP (Home Affordability Modification Program), essentially lenders are encouraged to offer loan modifications to homeowners that are either already behind in their payments or who face the prospect of soon being so.
Be sure to contact your lender and ask for their loan modification package. You should receive, at a minimum, a list of exactly what they require, and how to proceed and apply.
The information presented on this Site should not be construed as legal or financial advice. You are advised to seek consultation with a qualified Attorney and Accountant. ©Gabrielle Nemes, 2010