Owing to recent economic down fall, the Obama government and the United States Congress has started implementing many financial and economic laws and policies. The main idea is to help the citizens of our country by providing them a loan modification program. The mortgage modification program is such a loan modification provision that helps people with the repayment of mortgage and real estate loans. Loan modification program in a similar manner, helps the borrower with poor credit score to make their monthly installments flexible.
Mortgage Loan - and the details:
A mortgage loan is actually a real estate loan, which is used in order to purchase a particular real estate, principally a home. When a potential buyer is interested in purchasing a property, all he has to do is apply for a mortgage to the lender or a mortgage company. The principal amount of the loan is then forwarded to the borrower, with the help of which, the real estate is purchased. The rate of interest is decided on 3 principal factors, which are market projections of real estate, income of the borrower and credit report of the borrowers. Usually the time period of this debt is long, and rate of interest is low, which makes the mortgage loan an inexpensive and affordable secured loan. In fact, these characteristics of the mortgage were an important factor that triggered off the economic recession in the United States. The total amount of the mortgage loan is later paid off with the help of a series of installments, with a particular charge of interest.
Mortgage Modification Program
Because, of recent economic crisis, there are many people in our country, who are suffering from the problem of financial crisis and foreclosure. The lender of the mortgage loan and borrower himself suffer from loss of timely cash flow, and a drop in the credit rating and credit score. In such a situation, the best available option that any mortgage borrower can avail is a mortgage modification program. The mortgage modification program, is a very simple process, but involves a considerable amount of paperwork. It must be kept in mind, that modification is a different concept than mortgage refinancing and debt consolidation loans. The modification process basically comprises of changing terms and conditions of the same loan. There is no separate loan that is availed. There are some mortgage modification program qualifications that the borrower has to qualify for. Some of the common ones can be stated as follows.
- Property in concern must be the permanent residence of the borrower.
- The borrower must be able to prove incapacity to make timely installments, with the help of a debt to income ratio.
- The lender must have access to authenticate tax returns that have been filed by the borrower with IRS.
- The modification can also be undertaken after the borrower misses 3 consequent installments, or any others as specified by the lender.