Loan modification is the process of renegotiating mortgage terms to an affordable level.  Millions of Americans are facing foreclosure.  The good news is that the banks are willing to renegotiate the terms of these mortgage notes rather than take on additional REO inventory.  The cost to carry foreclosure property for banks runs into the hundreds of millions.  The banks still have to pay the property taxes, hoa fees, landscaping and maintenance fees.  It is cheaper for them to modify your loan and keep you in the property rather than foreclose and take the property back.

What Is The First Step To Modifying A Mortgage

Your first call should be to the loss mitigation department of the bank that holds your mortgage.  Explain the circumstances to the bank representative.  They may ask for your most recent tax returns, pay stubs and asset account statements.  You need to demonstrate an ability to be able to make the new payment should they grant you a loan modification.  If you are lucky you will get a reduced interest rate as well as a write down on the mortgage balance.  You may also get a no interest option for a while.  Often you can get a forbearance agreement which will lower your payment and tack on the difference to the mortgage balance.

If You Are In Trouble With Your Mortgage, Do Not Wait Til Its Too Late

If you are in trouble and put your head in the sand, you may just be doing yourself in.  If you know you are in trouble don’t wait.  Get help now.

Tough times call for tough decisions when it comes to money.  If you are facing a mountain of debt in a slow economy you should be nervous.  Large debt is what brings people down fast.  Once you start getting behind on your bills, it may be impossible to catch up.  It is important to tackle you debt head on and pay it off as soon as possible.  If you have to eat kraft macaroni and cheese and top ramen every meal it will be worth it.  You need to start living by your needs and not your wants.  Your wants are what got you in a pickle in the first place.  Just think that you are learning a new habit.  It may be painful at first but you can do it.

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What is the best advice to staying out of debt? Have more money coming in than going out. I have been in the financial world for nearly 18 years. It upsets me to see people suffering over money. The American Dream, keeping up with the Jones’s whatever you want to call it does not work. Stay out of debt and own your own life. It is better not to owe it to a financial institution.

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Contrary to common thinking, you are not what you eat. Rather you are what you think. What got you into debt was not a lack of money but what thoughts you where indulging in in you head. All of the fantasies and stories that you told yourself that were not real about why you needed to buy things that you did. I’ll pay it back at the end of the month, this is what you tell yourself only to make the minimum payment. But next month I’ll pay it back in full.

The More You Think About Debt, The More Debt You Will Attract Continue Reading »