Facing Foreclosure? Modify Your Loan! Alternatives to Foreclosure in Westchester County, NY

You’ve probably been hearing an awful lot about loan modifications. It seems like in this economic climate, the subject is popping up everywhere. Though I’m based in Westchester County, NY, helping distressed homeowners wade through the climate of the current recession is what I do. Though my area sweeps Rochelle to Portchester and a hundred points beyond, loan modification is a universal term. Allow me to explain.

A loan modification is an agreement negotiated between the lender and borrower that alters the terms of the existing loan. These modifications change the character of the loan by altering term, rate, balance, penalties, etc. These modifications can really help a homeowner who is holding a distressed property and teetering toward the edge of foreclosure.

Lenders are often willing to negotiate with a borrower when they are facing financial difficulties and unable to locate other alternatives for their financing. You must be able to demonstrate to your lender why it is in their best interest to agree to the loan modification. Upon agreement, the lender might be willing to reduce either the interest rate or the monthly payment. One of the primary benefits of a loan modification is that it is not reported to credit agencies and will therefore not carry a negative impact on your credit scores. For families who owe more than their home is worth, this could be a great way to reset and forego foreclosure.

Not all borrowers will qualify for loan modification, however. Let’s take a look at the attributes banks are looking at when they review your case with the lender. I’ve worked Westchester County, NY, for a long time. I can clearly state that every lender is different and there is no precise rule book to determine qualification for a loan modification. Based on data gathered from my personal experience, I’ve gathered some criteria generally considered:

When borrower no longer qualifies for a refinance or currently has an adjustable rate mortgage (ARM) and is behind on their mortgage because payments have escalated too high; a borrower who has experienced a hardship or is self employed due to tough economic conditions; someone facing foreclosure because they owe more than their house is worth.

The more of those reasons that apply to you the better. The government is now forcing lenders to renegotiate thousands of loans. With the housing market in chaos, and lenders bleeding money, lenders would rather modify a loan than deal with a foreclosure – even when you owe more than the house is worth!

If you’re in Westchester County, NY, or even if you’re not, give me a call. My experience can help you avoid foreclosure.

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