No one is happy with the housing crisis.  President Obama isn’t happy, which is why he initiated the HAMP (Home Affordable Modification Program) in the hopes of the foreclosure storm.  Banks aren’t happy, sitting on vacant homes that they can’t resell in the current market; costing them a millions a month.  Homeowners aren’t happy, because it is them that are losing their homes and their credit ratings.

Home loan modification is one way that this foreclosure crisis can be helped, by changing the conditions of your mortgage.  A loan modification can reduce your interest rate, change your rate from variable to fixed, or even both; it can extend the duration of the loan (usually up to between 30 and 40 years).  It can even lower the principal for borrowers whose homes have lost their value.

Everyone doesn’t qualify for a home loan modification.  You have to be able to show your bank that you are truly suffering from hardship as well as the means and willingness to pay your modified loan payments.  You’ll also need to prove you’re employed, how much money you make.  The lender will look at all of this, and then consider your ratio of debt to income, employment history, and your ability to keep up with your new payments.

The application process includes compiling a complete financial profile with all of the supporting documentation. You will need to show proof of employment and salary as well as a detailed plan of how you intend to meet your payments. The bank will consider your debt to income ratio as well as your employment status and ability to pay your mortgage.

To start though, you need to meet with your bank.  If you’re already IN foreclosure, or are in danger of being so because of missed payment, you may want to have a profession home loan modification specialist help you in the process.  If you’ve applied and been rejected you’ll also want to seek out the help of a professional.  Loan modification specialists have more knowledge on the topic than the average person and may find something you’ve missed.   You staying in your home makes everyone happy.

Learn more about Loan Modification at Legal Loan Bailout