Florida homeowners have been told they have a new wave of hope coming their way to help avoid foreclosure. As so many other homeowners around the nation have experienced, Florida residents have also found securing a loan modification to be extremely difficult or virtually impossible. With the threat of foreclosure pounding the shores of so many Florida homeowners, a new program has been launched in attempt to help fight back. However, some are concerned about the effectiveness of this new program and whether there will be any adverse effects in the long run.
New Modification Program
With little information about the long-term ramifications of this new program, some homeowners are simply ignoring the potential for danger in efforts to secure a loan modification that works for them. The Bankruptcy Mortgage Modification Mediation Program claims to have helped numerous homeowners restructure their mortgage debts and, ultimately, avoid foreclosure. Sound too good to be true?
In many ways, yes. However, if we look at the specifics of the program we might be able to infer some specifics about whether there is a potential for problems on the horizon. The program is basically a streamlined version of the Chapter 13 process, in which borrowers can negotiate their mortgage debt repayments with their lender over a three to five year period. With the extension of payments, borrowers can secure lower monthly payments and get caught up on their mortgages without the threat of foreclosure. However, like any other bankruptcy proceeding it does come with some costs.
Traditionally, filing for bankruptcy does not secure lower mortgage payments on its own and will need further help from an additional loan modification program to do so. This new program simply allows for a more efficient negotiation process with more legal representation to entice lenders to comply. Further, there are some concerns over whether participation in the program will carry the Chapter 13 credit history notification that a traditional bankruptcy carries.