More American’s today are in dire straits when it comes to their mortgages, are either facing foreclosure, are in foreclosure or are having difficulty in making their mortgage loan payments in a timely manner. Because of the mortgage crisis and issues that arose around the mortgage crisis, many homeowners have had no place to turn. Mortgage lenders were typically not lenient with borrowers or showed much empathy as they were in deep water themselves. Therefore provisions for loan modifications were put into practice by The Making Home Affordable Program which was created and established by the Financial Stability Act in 2009. Part of The Making Home Affordable Program was created and called the Home Affordable Modification Program which assisted those struggling financially that were on the brink of foreclosure. Today, over one-hundred ten renowned lenders have teamed up with The Making Home Affordable Program and work with potential applicants deciding if they qualify for the loan modification program.
So what is a loan modification? A loan modification simply means that the mortgage loan is modified outside the original terms of the contract been the mortgagor and the mortgagee. Loan modifications offer different types of modifications to include: changes in the terms of the loan, reducing the principal amount of the loan, lower monthly mortgage payments or interest rate, lengthening the terms of the loan, and reduce penalties. The loan modification program does not discriminate based on the status of the mortgage therefore at the time a borrower applies for a loan modification, mortgagees can be either current with their mortgage payments, late, in default and even in foreclosure.
Who qualifies for the Home Affordable Modification Program? There are several prerequisites and eligibility requirements for those who seek to modify their mortgage loan through the Home Affordable Modification Program: loans must have originated on or before January 1st of 2009, first lien loans on owner occupied residences must have an unpaid principal balance of $729,750, all potential borrowers must document their income and sign an affidavit of financial hardship, property owner verification will be verified, and modifications can only be done once until December 31st of 2012.
The Making Home Affordable Program is a compliant and legitimate program offered through the U.S. Goverment; however there are warnings and scams to take heed to. After the crash of the mortgage crisis, many mortgage companies created separate divisions calling them ‘mortgage foreclosure rescue services’ which promised borrowers that they would work on their behalf (for quite a fee, no less) to beg and plea with their lender to modify the loan. Many desperate borrows have fallen for this trap, as the Home Affordable Modification Program would never operate as such. Borrowers must be aware of the several modification scams that are ravaging throughout the country, and borrowers must beware. It’s imperative to remember that scammers offer false promises and often tell the borrower to stop making mortgage payments to their lender as they will become the liaison between the mortgagor and mortgagee. In addition scammers ask for fees upfront requesting that they be wired or mailed overnight and only accept payment through a cashier’s check or money order.
The U.S. Government hosts a number of resources at no charge offering homeowners the tools that they need to get for more information on loan modifications through The Making Home Affordable Program. HUD.gov and HUG.org are excellent sites to obtain the information with HUD approved counselors available by phone as well to answer any questions.
Education on the home loan modification process is truly the key when researching options. With the vast amount of resources provided to borrowers through their lenders and The Making Home Affordable Program, many have been able to keep their homes by modifying their mortgage loans, saving them from foreclosure.
Keith Munsell 
