Your Home: Fighting To Keep What's Worth Fighting For - With A Loan Modification

Background on loan modifications in the recent years

The recent and continued loss of homes in the United States in the face of economic difficulties is perhaps the biggest tragedy associated with the current financial crisis. Sinking home values have made it extremely difficult for millions of Americans to hold on to their homes because they can't refinance their mortgage nor sell their homes if they can't afford to make their current mortgage payments. In other words, lower home values mean that the selling and refinancing of homes becomes increasingly hard to accomplish.

That said, many homeowners have decided to short sell their homes rather than to keep their homes because either they do not have to keep a home with negative equity, or they failed at modifying the terms of their mortgage. Walking away makes the most financial sense when and if the negative equity is too large, and the goal of the homeowners is not long even to grant a break-even point in the near future. At the same time, others have refused to lose their homes and are committed to taking all the necessary steps to ensure that they do not have to do so.

For those who intend to keep their homes, loan modification programs have become one of the primary means of accomplishing it. These programs are aimed at creating more affordable mortgage payments, but these programs can often be challenging to qualify for due to an incredibly complicated application process.

How Banks Handle Loan Modifications

Banks often make the application process very complex. Either the banks do not have the proper infrastructure in place, or they are giving people the run-around on purpose.

Mistakes to Avoid When Applying for A Loan Modification

The other issue is that many people apply to restructure their loan without a proper understanding of what the process entails, and what will be required of them. This can delay a positive response to an application for many months, or even make it impossible to receive for many people. The reality is that those who are not pre-qualified will not receive the approval they are hoping for. Here are almost two critical criteria for qualification:

The homeowner needs to demonstrate to investors and lenders that modifying their existing loan is more cost-effective than foreclosure. To help with this, the FDIC has put in place a Net Present Value (NPV) analysis of a loan modification.
They also need to demonstrate their ability to cope with their new mortgage payments. Simple English: if the borrower is not able to make the new lowered mortgage payment, he/she won't receive the modification.

Having advanced knowledge of whether or not you qualify for loan modification is therefore key. For those who are not pre-qualified, taking responsible measures to adjust their budgets could improve their chances of being approved, granted this is their goal. The more informed a consumer is, the more empowered he or she is to make the correct decision.

If you're considering applying for loan modification, it's important that you evaluate and receive guidance for the ratios that are critical in your loan analysis for modification. These ratios include pre and post modification ratios.

Instead of trying to do this on your own which certainly requires some strong skills in Mathematics, it is best to seek self-help that provides an easy solution, unbiased and conflict-free analysis when assessing your loan for a modification.

Caal loan modification software is designed to simplify the process and increase the chances of success and approval.

For more information please visit https://www.mycaal.com/

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