What You Need to Know About Loan Modifications

Loan modifications are complicated. Homeowners need to know all the facts before hiring third party help. Rest assured, there is help.

What You Need to Know About Loan Modifications
By [http://ezinearticles.com/?expert=Amanda_Nash]Amanda Nash

In light of the current economic and foreclosure crisis you may have heard a lot about loan modifications. A loan modification is a modification made to a homeowners' existing loan or loans and the lender and homeowner are bound to the new terms. Typical modifications include lowering the interest rate, principal reduction, "fixing" adjustable interest rates, extending the loan term and forgiveness of payment defaults and fees. Loan modifications are very beneficial for homeowners who are having a financial hardship including owing more on your home than you can sell it for, know as negative equity.

When you are looking for a company to assist you in the loan modification process, beware. In this current market many new companies have popped up touting loan modification services. Many of these companies are taking homeowner's money and letting their files go into foreclosure because they do not have relationships with banks or the manpower to complete the process.

Paying for a loan modification alone is a very dangerous option. Homeowners need to look for a company that offers a comprehensive negotiation process. For example, if loan modification negotiations do not provide the homeowner with an acceptable new loan agreement negotiations should then be started for a short sale. This is a process whereby a lender reduces the principal balance of a homeowner's mortgage in order to permit the homeowner to sell the home for the actual market value of the home. This specifically applies to homeowners that owe more on their mortgage than the property is worth. With out such a principal reduction the homeowner would not be able to sell the home without owing the difference to the lender. Another option is called Deed in Lieu of Foreclosure whereby the lender releases the homeowner from the obligation of the mortgage in exchange for the deed. One more option is Cash for Keys where the lender will actually pay the homeowner to vacate the home in a timely manner without destroying it in exchange for cash. All of these additional negotiations should not cost you any additional money to complete!

As you can see, there are many options available to homeowners in crisis. It's important to do your homework and find a reputable company. If you have any additional questions or would like a free consultation based on your personal situation please feel free to contact me immediately.

Amanda Nash,
Specialist,

Pacific Credit Solutions http://www.PacificCreditSolutions.com
(877) 624-3255

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