Since President Obama released the Home Affordable Modification Program in 2009, less than one-third of the estimated borrowers in mortgage debt have sought help from the program. Part of the problem has been a lack of consumer education about their loan modification options, the other has been the lack of willingness of the part of the lenders to cooperate with negotiations. In either case, the time has come for homeowners to get informed and start taking action to protect themselves from foreclosure.
A Crash Course
Homeowners who are struggling to maintain their mortgage payment should consider the honest truth about their situation. First, can you really afford to maintain the mortgage at a lower payment? Second, are you planning to stay in the home for a long period of time? Last, is your home currently worth more than you owe on the mortgage? If you answered “Yes” to these questions, a mortgage modification may be a good solution for you.
Here is how to negotiate with lenders to maximize your changes at a loan modification:
- Contact your lender before you miss a payment, they are often more willing to negotiate before you default.
- Provide your lender with a few options on how you can lower your payment enough to suit your budget (i.e. lower interest rate, longer loan term).
- Contact a foreclosure lawyer to represent you during negotiations.
- Review your options through government programs such as HAMP.