ARE you currently struggling with high mortgage payments? Did you get your loan modified in the past but now have a new hardship based on changed circumstances? If so, this is an important article that you MUST read.
If you’re one of the many people who got approved for loan modification many years ago under the HAMP Program, chances are that you obtained a low interest rate of 2% for 5 years and then your interest rate is set to increase after that time period. Other homeowners either did not qualify under HAMP and so were given by their lender an in-house modification with less favorable terms or the interest rate given by their lender under HAMP was much higher than 2% from the start.
Studies show a high percentage of default even after modification. From what I’ve seen personally, these defaults could have been for a number of reasons: (a) the homeowner’s changed financial circumstances after modification (b) the homeowner decided that he or she still couldn’t afford the modified payments after all although income has remained the same and (c) the homeowner was never interested in keeping the home on a long term basis to begin with and simply wanted a loan modification “to buy more time” to stay in their home. Again, these have been my personal observations only- there could be other reasons.
But for those who have remained current since their modification, they are now facing a new challenge as they approach the fifth year of their modification. Unless their income has increased in the last 5 years, there’s a good chance that they will not be able to afford the higher payments after the 5-year period under HAMP. So unless they can keep their payments the same, they may be back in the same position as they were before they obtained a loan modification 5 years ago and be at risk for foreclosure again. NOT GOOD. This is the reason why a lot of people are looking into doing a loan modification again. The BAD NEWS is that you now have a very limited time to apply because the government program ends this year 2016 unless extended again, which I highly doubt.
DO NOT MISS THIS IMPORTANT DEADLINE if you think you will benefit from a loan modification by helping you get current if you have fallen behind on payments, reduce your interest rate, which of course, will result in a much lower monthly payment than what you currently have. If you have an interest-only loan, read your loan agreement to find out when your payments will adjust because there’s a good chance that when it does adjust, it will be an amount that is significantly higher than what you are paying right now. I find that most people are in for a shock when they find out what the higher payment will be! Don’t let this happen to you.
Of course, this program is not for everyone. Whether or not you should apply for loan modification again will, of course, depend on your intentions and long-term plans with regard to your home. Again, the HAMP Program ends this year 2016 and you may miss out on this opportunity unless you act now. If you need help in figuring out your options regarding your mortgage, my office can help. Call us at 866-477-7772 for more information.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.