mortagesandforeclosures

by Brian Hughes

Shrinking economy, dwindling job scenario and unpredictable monthly incomes are making it extremely difficult for the mortgage loan debtor to pay their monthly premiums. In such troubling economic times, mortgage modification is like a breath of fresh air for all home loan borrowers to avoid foreclosures and homelessness. Mortgage modifications are essentially the reorganization of interest rates and term & conditions in the existing contract of the borrower by the mortgage lender so that they are able to afford the monthly payments.

The term mortgage modification is not new for US financial institutions as this measure was introduced during the Great Depression of 1933 to help the people from saving their homes. Since the worst downturn in the US mortgage industry starting 2006 mortgage modifications is used as a measure to:

1. Help the borrowers reach sustainable long term mortgages. 2. Generate higher returns for investors then achieved as result of foreclosure. 3. Stabilize the prices of homes which are seeing a steep decline due to growing foreclosure cases.

In order to become eligible for mortgage modification you need to convince the lender the reasons behind your inability to make monthly payments. Generally one of the following circumstances strengthens your chances of being accepted for mortgage modification plan:

1. Death or sickness of the main earning member. 2. Falling behind regular mortgage premiums - Unemployment because of recession. 3. Divorce. 4. Special consideration for members of armed forces

The date of the current approved mortgage loan, principal amount remaining and the percentage of monthly salary that is spent towards paying premium are all considered before processing mortgage modification application. While applying for mortgage modifications you need to furnish necessary documents that provide supporting evidence that you have sufficient household earnings every month to pay towards the mortgage premium. The following documents need to be submitted along with mortgage modification application:

1. Last four more recent pay stubs. 2. Previous year tax returns and other financial document. 3. Latest mortgage statement - Hardship letter, various disclosure and any other legal notices. 4. Signed 3rd party authorization form. 5. Signed Loan Modification agreement.

Mortgage modification is the most realistic and permanent solution for all debtors that want to continue living in their own homes by bringing about a reduction in existing mortgage monthly payments.

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When you are looking for a mortgage and need to know what your payments will be, you can always check a mortgage payment.

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