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The reasons for the increase in delinquencies are (1) more option Adjustable Rate Mortgages (ARM) are resetting to higher rates triggering defaults and (2) more prime fixed-rate loans are defaulting due to job losses.
Question: What does the statistics suggest to borrowers?
Answer: The statistics show that the bank are very picky on what loans to modify. The main reason is that the staff in the Loss Mitigation Department of the bank are so busy that they have insufficient time to analyze the individual borrower’s case. There is huge number of applicants but the bank’s staff are insufficient to serve them effectively. Many of my clients tried to do the loan modification themselves but they were unsuccessful. Many of them came from HUD counseling but were unsuccessful tin modifying their loans.
Question: What types of loan can be modified under the Obama program?
Answer: The Obama Loan Modification Program will modify loans that are secured through Fannie Mae and Freddie Mac. FHA loans have their own program of loan modification. Most mortgages are guaranteed by Fannie Mae, Freddie Mac and FHA. If you have any concerns whether your loan can be modified you may contact your lender or a loan modification attorney.
Question: Can a homeowner apply for loan modification while in bankruptcy proceedings?
Answer: Yes. However, it is better to apply for loan modification before filing bankruptcy because you have a better chance of getting better terms in modifying your loan.
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