A loan modification is a process in which the original and authentic terms of your mortgage undergo a modification via a new agreement. In most cases, it involves reducing your interest rate and monthly payment and also spreading the due amount. There are some modification programs that derive their outcomes via “re-amortization.” So, what is “re-amortization?” This means that the your payment plan’s length will be extended so that you can make lesser payments as the time passes by. There are some loan modification plans that could cost more later on, since they serve as a way to make the ongoing payments more affordable.
There is a loan modification program, known as Home Affordable Modification Program (HAMP). This program was created in 2009 by the Federal Government. Apart from establishing this program, the Federal Government also funds it. The guidelines of HAMP offers many benefits that are designed and created to help you get yourself back with your mortgage and also save your home. Some of the benefits attached to this program include reducing the monthly payment you make to 31 percent of the gross income of your family and reducing the interest rate which you have to pay.
Who Are Eligible for HAMP?
A benefit attached to HAMP is that the lenders are obligated to consider every borrower on terms of the federal guidelines. These federal guidelines are uniform. Hence, the process is straightforward, as your loan is modified as per the guidelines as long as you meet the criteria for eligibility. For you to be eligible for HAMP, you must:
- Be in default or in danger of default
- Possess a documented financial hardship
- Successfully finish a trial period. This trial period usually lasts for 3-4 months.
For any kind of information on loan modification attorney and loan modification options, you can visit www.loanmoddepot.com.