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What You Need to Know About a Loan Modification?
First of all, the banks are subsidized by our TARP money and encouraged to re-structure existing loans for homeowners.
Many banks are already partially owned by the government, for example the government owns 35% of Citibank to name one.
So, it seems clear that the pressure is on the banking systems to restructure loans and turn our economy around as quickly as possible and with the support of government programs.
Let's be clear on the difference between a loan modification and a refinance.
A modification does not pay off your existing loan or look at credit to see if your credit is worthy or not.
That means great credit or poor credit does not matter in the decision making.
Many homeowners don't realize that there are many benefits of a loan modification that they are otherwise not privy to if they did a refinance.
One of the key points to remember if you are starting to think about a loan modification is that you do not have to have equity in your home.
If you have equity that is fine and if you don't have equity that is fine and does not play into qualifying.
In some cases, if you are significantly upside with your mortgage, a principal reduction may be warranted.
As with a refinance, you need two years of employment to qualify for a loan.
This is not the case for a loan modification.
The length of employment is not a factor, or change in income, or gaps in employment.
The only real factor is that you can prove your income to the bank.
The bank also can use income of others that are living with you and these people do not have to be on title or on the loan.
This is great news for someone needing a loan modification and can use these other sources for qualify.
You also do not have to be in an adjustable interest rate loan to qualify for a modification or have an extremely high interest rate.
There are several programs like Making Home Affordable or Home Affordable Modification Program that you may qualify under plus others.
The quickest and easiest way to find out if you qualify for a loan modification, is to contact a professional that will qualify you for free.
It is basically your time to collect paperwork and also fill out paperwork.
It is similar to a CPA doing your taxes, which is hiring a Modification Attorney to prequalify you for a loan modification for free and offer 100% money back guarantee.
The better Modification Attorneys offer this service.