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Wed, 30 Nov 2011 11:12:18 AM

Recent Loan Modification Statistics and Research Show Large Number of Successful Modifications


Historically, mortgage financiers either collected on time monthly payments or foreclosed on the property. The economic downturn and subsequent stimulus packages have provided a third, much needed option: loan modification.

Loan modification allows the homeowner to renegotiate the mortgage to lower payments by various means. This could be by reducing the interest rate or moving interest payments to the end of the life of the loan, among other things. There are many financing options available that the general public may not be aware of. It is up to the homeowner to initiate the process of loan modification by contacting their mortgage holder.

According to the latest research and financial industry reports, over 5 million people have successfully completed loan modification and have been able to remain in their home. This is in part due to collaboration between non-profit organizations and the finance industry. In 2007, such a partnership started Georgia’s HOPE Now Alliance campaign. Their goal was to provide a public venue where ailing homeowners could get together with their financiers to work out a loan modification. Working with Atlanta’s CredAbility, which provides financial counseling; Georgia now boasts over 170,000 successful loan modifications.

Congress is currently working on a bill to provide $45 million in the federal budget for housing counseling. This will provide more homeowners with the knowledge they need to successfully keep their home and significantly lower their payments at the same time. John Dalton, the Financial Services Round table president of the Housing Policy Council in the banking industry, is confident this bill will pass which would subsequently provide the funding needed for such non-profits as CredAbility, according to online news sources.

The face-to-face environment provided by the HOPE Now Alliance campaign is a key factor. It encourages open communications, and minimizes misunderstandings. By meeting the homeowner, the financier can be confident that they fully understand what options are open to them. The homeowner has the opportunity to appeal to the financier, explain their particular situation, and ask unlimited questions to clarify things they do not fully comprehend. Both parties will be looking at the same papers and the same numbers, something that usually cannot happen with a phone call.

Renegotiating terms with their financier can save the homeowner several hundred dollars each month. While it may not be the perfect solution for everyone, loan modification programs provide a viable option.

 

Earlier in Loan Modification News:
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Antioch Man Battle for Loan Modification Saves Home from Foreclosure
Wells Fargo Settles Bias Lending Lawsuit
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