What is a loan modification?

Loan modifications have been running rampent in Orange County Southern California and all across america as a result of many key factors in this economy, But what is a loan modification you ask;  it’s when a borrower — who is facing great financial hardship and is having difficulty making their mortgage payments — works with their lender to change the terms of their mortgage loan. The workout plan could result in temporary or permanent changes to the mortgage rate, term and monthly payment of the loan. The plan’s goal is to help the borrower reduce their monthly mortgage payments to 31% of their gross income. Under Obama’s plan, loan modifications will be standardized, with uniform loan modification guidelines used by Fannie and Freddie Mac, and then they will be implemented throughout the entire mortgage industry.

 What happens if you Dont modify the terms?

First you could sell the house as a short sale…According to wikipedia a short sale is:

The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower’s financial situation.

Mortgage Crisis in terms of garage doors:

It has been good and bad for the garage door company, on one hand all of the doors that are being destroyed by enraged home owners have brought in new business, yet on the other hand people do not have money for new doors like they used to. Service is just out of necessity now and the same with new doors… A friend of mine does orange county loan modifications with a money back guarantee, you should definitely give them a call before losing your home.