A loan counselor is the person at the bank who helps borrowers who are either struggling to pay their mortgage payments or individuals that cannot meet the qualifications for a particular loan. These people try to make ends meet for both the borrower and the lending institution. They want to make sure they are doing everything they can to protect the lender they work for, but at the same time try to help people manage their financials to avoid future problems.

For individuals that are applying for a mortgage loan, but have a less than perfect credit score, the loan counselor will be the one the to evaluate that persons current and past financial history. This evaluation will have many different stages that include comparing their current income to current expenses, how old the negative marks are on their credit report, and the way they have managed their other obligations over the past year. Once the loan counselor is completed with their review, they are more than likely able to give suggestions as to which lenders provide loans to people will less than perfect credit. But keep in mind that lenders that offer this type of assistance will often times carry a much higher interest rate on their loans.

Loan counselors are also there to help borrowers that have already obtained a mortgage, but have found themselves in a position where it is getting difficult to pay their monthly payments. The main goal for this person is to try and exhaust all options before letting the borrower default on the  loan. This type of assistance can include a refinance, loan modification, short sale, or sometimes even a deed in lieu. In some cases of only temporary struggles the loan counselor can request what is called a forbearance period for the borrower. What this does is either cut their payments in half or no payments at all for the next 6-12 months. They will explore all of these options to try and keep the borrower from defaulting on the mortgage, or possibly even help keep from foreclosure.

However, sometimes there is no solution that will help the borrowers financial struggles. If this happens defaulting will be definite, and the borrower will lose their home.

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My name is Maurice “Moe” Bedard. I am the founder of America’s #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.

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