Loan modification can save your home from being foreclosed by the bank or lender. Here, you can request that the interest rate on your loan be changed into one that is more affordable to you or you can also petition to extend the term of your mortgage.
In some loan modification programs, you can even apply for a change in the balance of your loan’s principal. In any case, the modification to your loan is intended to make it easier for you to complete payment, so that the bank and you will be both happy. But this is not to say that there are no snags on your road to recovery via a loan modification.
When applying for a loan modification, you need to know a few things that can protect you from scams that can lead to foreclosure of your home. Some people out there are using the good intentions of refinancing or loan modification to advance their own personal gains. Thus, you really have to be careful when you are fighting to avoid foreclosure. Get all the facts before you pay someone to help you work out your mortgage problems.
Here are some basic tips below:
Fraudulent foreclosure help organizations may promise to take care of your problem with your mortgage lender or to obtain refinancing for you. Sometimes they also ask you to make mortgage payments directly to them.
They have even been known to ask the homeowner to hand over the property deed, claiming that if the homeowner then makes the mortgage payments to them, they will be able to in stay in their home. Instead of contacting your lender or refinancing your loan, the con artist pockets all the money you paid, and then files a bankruptcy case in your name – sometimes without your knowledge.
A bankruptcy filing often stops a home foreclosure, but only temporarily. If a bankruptcy is filed in your name but you do not participate in the case, the judge will dismiss the case and the foreclosure proceedings will continue. If this happens, you will lose the money you paid to the scam operator – and you could lose your house. You will also have a bankruptcy listed on your credit record for at least 10 years.
Avoid loan modification companies that call themselves attorney based or backed. A loan modification attorney should be the one doing a loan modification and being backed by one is usually just a play on words to make you feel better.
Also try and work with loan modification or foreclosure companies that have some type of refund policy, either a full or partial refund.
If refinancing is underway, never sign any document that you can not fully comprehend. And always make it a point to have all the concessions or agreements in writing.
Your main focus right now is to avoid losing your home to foreclosure. Such an event can seriously damage your credit rating and your capacity to borrow money later on. This is why it is important for you to qualify for a loan modification. You can go about your application on your own. But it is important that you know what you are doing.
Nevertheless, you can always consult with any loan modification attorney. These firms often provide consultations that are free of charge. And most, if not all, of these firms are legitimate and can provide you with a good service that you deserve. In fact, if you want a smooth sailing application, you need the services of licensed professionals that are trained and experienced in loan modification attorney.