With the economy in such a world of distress, there are millions of homeowners out there potentially at risk of losing their homes. Factors such as the declining job market and the subprime mortgage crisis have caused millions to seek assistance in paying their mortgages.
The number one most effective way for a homeowner to seek assistance and stay in their home is through a loan modification. If you are able to achieve this you can lower your current monthly payments by lowering the interest rate, extending the term, or changing the mortgage from an adjustable to a fixed rate. This can also help you catch up on many delinquent payments by adding the arrears to the back of the mortgage.
One problem we tend to find is that borrowers jump on the first offer they receive form their lender. Many times borrowers will accept an offer that does not change the terms of the loan in anyway just to bring the loan current. Depending on your financial situation this can be a huge mistake!
If you are seeking a modification just to bring your account current than almost any agreement will work just fine. But if you are one of the majority of borrowers seeking this assistance because of a financial hardship that has caused your original payment to become unaffordable than you must make sure to decline any agreement that is not manageable. Accepting an agreement can prevent foreclosure but if you cannot manage the payments you will be in the same position next month.
For those homeowners out there that did accept a modification where the terms were not affordable you may be asking yourself "how many times can a loan modification be done?"
This question will be difficult because the answer may vary depending on the servicer and the type of modification the borrower is applying for. For example, if you accepted a modification through the government's Making Home Affordable Program (MHA) but the agreement did not meet your standards, you most likely cannot reapply for that program for twelve whole months. However, some lenders may allow you to reapply for a regular in-house modification right after you had accepted the terms.
On the other hand, if you accepted a a regular in-house modification than you may be able to apply for another one right away. However, it is crucial to keep in mind that these rules may vary depending on the servicer and their particular guidelines.
If you are considering accepting an agreement because you are afraid foreclosure may be in the near future, it would be wise to first contact your servicer to see if you will be able to apply for another modification within the twelve month time-frame. It would be a shame to go through all that hard work to achieve a loan modification just to end up in the same position immediately after accepting the agreement.
For those out there looking to obtain more information about loan modifications, short sale, deed in lieus, or anything else in regards to your mortgage, we encourage you to join our free forum here on LoanSafe.org that now has more than 28,000 members across the nation!