Are you going through financial troubles, and seriously worried about losing the home you have worked so hard for, to foreclosure? The economy has taken a turn for the worse and many people that are sound in their financial handling are winding up in this situation. It doesn’t seem fair. It roots in downsizing, less spending in general, and even failing banks. It’s time to take action and get ahead of it rather than underneath it. Less income beyond your control shouldn’t be the thing to waste all you have invested.

If you are already in foreclosure, behind on your payments (and closer to foreclosure), or simply worried it will come to those: act today to find a better day! Recent developments in the United States have introduced the concept of home loan modification programs. While it is still not strongly defined in one place, one constant aspect across the board is that it will halt foreclosure where it sits during the application process. With successful approval you can have your payment reduced to as low as 31% of your monthly income. This could make the difference you need to stay afloat during the current trends.

These new programs have been inspired by recent government actions that are being taken to assist people that have worked hard for their homes to keep them. They may enable you to stop your foreclosure and the likeliness of future mortgage payment troubles (through making it more affordable). Seeking a home loan modification today is the best way for you to act and get onto a better day.

Being new, there isn’t a lot of information available on these programs (from lenders or government agencies). This is preventing many from finding out what they need to do in time. The process requires first being informed about what the loan modification does, and how it works. It amounts to having the amount you pay reduced to where it will fit your budget. Many that have never had a problem before are today struggling, and the reason by these plans is to help those that are trying to help themselves, to succeed.

With successful application, and approval the home loan modification will reinstate the loan payments (and stop foreclosure) at a reduction. The actual reduction may come in several forms including rate reduction, principle reduction and more. The effect is a lower payment that will be easier to keep up with, for the long run. While many lenders offer great assistance already for these programs, each may have different procedures. Yet others do not offer much help.

Loan modification is so common these days that scam artists have picked up this little trend as well. Following are some of the guidelines for you to avoid any home loan modification scam. You need to be aware of these because even the FBI has issued numerous warning to home buyers to beware of loan modification firms who are not accredited.

1. If the offer sounds too good to be true, it probably is. If a company comes up to you and promises to deliver on a certain interest rate, or a said principle reduction amount without even negotiating with the lender, it probably is a scam.

2. Vile natured companies would come up to scam poor unsuspecting homeowners. Most of the times, the homeowners that fall prey to the scam are the ones that are trying hard and struggling to meet ends meet with their mortgage payments and commitments. Seldom homeowners that are keen on selling their homes may also come under the radar of such scam artists.

3. If you are approached by someone who is asking for you to pay a fee, you should immediately know that there is something fishy in the process. You can almost always get advice and assistance from a US Department of Housing and Urban Development (or HUD)-approved housing counselor. This service is provided to you free of charge and you are in no obligation to pay a fee.

4. You need to be aware of anyone who asks you to pay upfront before even initiating a deal with your lender. If they demand a fee in return for providing you a counseling service or modification of a delinquent loan, they are most probably scamming you.

5. If you have assigned a negotiator for help with your loan modification, you need to make sure that this third party negotiator doesn’t agree on the first proposal that is set by your lender. By the time you loan modification is approved, you’d realize you still are in deep trouble and that you could have had done better than that in the first place.

6. Do not sign a single copy of paper under pressure from anyone. People usually get you into signing or transferring your deed to your house. In no circumstance should you ever sign over the deed to your home or property to anyone.

7. Never make a mortgage payment to anyone other than your mortgage company without their approval. You can never be aware of such malpractices and scams.

Even if you do find a trustworthy company, they usually charge thousands of dollars, and never bring the results you need. If you hire a company, your lender won’t see it urgent because if you have thousands of dollars to shell out on a firm, then you must be able to pay your mortgage. Either that or they make minuscule changes to your loan. The best way to avoid this, is to do your own loan modification. But most homeowners who choose this route don’t research and don’t know the subject too well. They fall in the same trap as when they bought the house.

With loan modification it is possible to lower the interest rate on a mortgage by as much as 5 percent. But you need to show the lender that you’re serious. You need to write a well written hardship letter, and know vocabulary that will catch the lender’s attention.

Some of this information is available online, but its filled with scams and false information. The problem with trying to modify a home loan is that it’s a one time thing. If your lender rejects you for application, its over. Your lender won’t revisit your case anymore, even if you call them a million times. That is why you have to get it right the first time.

The creator of 60 minute loan modification is not some chump. He went through the same situation and almost lost his homes to foreclosure. He renegotiated 5 of his mortgages to affordable rates, saving himself from bankruptcy. The information he sharing in 60 minute loan modification is invaluable.

Here are a few things that make 60 minute loan modification unique:

- Unlimited email support- If you need help or have any questions
- Real Lender-Homeowner Negotiation Recordings – Hear what to say and more importantly what not to say
- It’s quick – Only takes 60 minute to complete

Overall this system is great; it has everything you need to be successful when applying for a loan modification. One of my neighbors used this system with great results. I helped him out with his application and the process, and saw how detailed this system is. I really recommend it for people who ran into some though luck, and need to find a solution for their mortgage problem.

Here are some basic steps to getting your lender to agree to a mortgage modification:

Step # 1: Be Pro-active
The best time to approach your lender for help is before you have become delinquent. Contact your mortgage lender as soon as you realize that you are in trouble. Once your account falls into arrears; it will be harder to convince the lender that you are trustworthy.

Step # 2: Check Your Lenders Website for Modification Procedures
Many lenders these days are offering a step by step guide to mortgage modification on their websites; complete with the necessary forms and contact names. Although modification isn’t something you can apply for online, using the information on the bank’s website is a good guide for getting started.

Step # 3: Make a Call
Once you have downloaded the information and forms you need from your lender’s website, you must call them and let them know you are interested in a loan modification. Have all of your paperwork and financial information ready when you call, and always ask to speak with a loss mitigation representative – they are the only ones authorized to modify any mortgage loan.

Step # 4: Keep Your Cool
No matter how the person on the other end treats you, it is crucial that you remain calm and polite when speaking with your lender’s representatives. The fact remains that they are under no obligation to help you and if you allow your emotions to run wild, you may find yourself without the modification help you need right now.

Step # 5: Get to the point
Once you get the right person on the phone you’ll want to make your pitch for a modification quickly. Practice explaining your situation clearly and briefly before making this important call. Give the information they need to begin the process without belaboring each point and wasting the representative’s time. Remember, they must work with hundreds of people just like you every week and the odds are they’ve heard your story a thousand times since the mortgage crisis began.

Step # 6: Don’t Be Afraid to Ask for Help
Be sure that you know exactly what type of mortgage modification help you need and be sure to ask for it. You wouldn’t believe how many people call their lender asking for help, without ever telling the person on the other end of the phone what they really want. Then they are angry when they can’t get their payment lowered to the amount they need. Be clear with your requests.

Step # 7: Be Sure to Follow up
Every time you speak with someone on the phone, be sure to get all of their contact information (name, title, department, phone number, etc) and document what you talked about. That way, if questions or disputes arise, you will have a clear record of what was said (and by whom). Finally, always send a written thank you to everyone you speak with as a polite follow-up to your conversation. It’s a great way to help people remember you and make them more willing to go that extra mile to help you out.

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That doesn’t mean that you can’t negotiate a new payment you can both live within the years to come. You just have to learn a few negotiation tips.

Tip #1: Lenders Aren’t As Opposed to Modifying Loan Terms As They Once Were

With foreclosure at an all-time high, lenders aren’t as resistant to negotiating mortgage modifications like they once were. If you are proactive, able to ask for a loan modification before your home enters the foreclosure process, you can save your lender thousands of dollars in lost revenue and fees; making them more likely to negotiate.

Tip #2: Don’t Be Confrontational

Too often people look at the negotiation process as something that must be confrontational. In reality, nothing is further from the truth. Instead of fighting your lender throughout the negotiation process, enter into it with the mindset that the two of you are working together to find a win-win solution to your problem. If you consider yourselves adversaries, the conversation will be a very different, and, and much less effective.

Tip #3: Control Yourself

Facing your financial situation can be emotional. Add to that the stress of trying to convince your lender to let you off the hook for some of your debt, and you can quickly find yourself showing too much emotion. Don’t let your pride, your sorrow or even your frustration get in the way. Keep your emotions in check with every bank representative you speak with. Some will be easier to handle than others so be especially careful when dealing with the harder ones.

Some things to remember when speaking with your lender are that they didn’t get you into this mess; you did and they are only trying to help. Stay calm and always be polite. If you are very concerned about your emotions becoming a problem, you can always:

• Ask the person on the other end to hold for a second to give you time to collect yourself.
• Stay focused with a pre-prepared list of questions.
• Breathe deeply and pause before answering questions and speaking
• Don’t allow yourself to sound frustrated or angry – it won’t help!

Tip #4: Put yourself in your lender’s shoes

Think like a lender and you just might be able to negotiate a better outcome. Remember, your lender gave you the money for your house in the first place to make money, so be sure to find a way to convince them that their investment is sound; with some adjustments, of course. Be attentive to what the representative is offering and be willing to concede some issues in order to get the loan changes you need.

Tip #5: Do What It Takes to Make Your Modification Happen

Don’t be afraid to ask your lender what you need to do to get your loan modified; then be willing to do it! If that means selling your car or giving up your cell phone, than by all means agree! Some lenders don’t ask their clients to make lifestyle changes in order to get a loan modified, but some do. Be prepared for either scenario.

Some questions you might ask your lender include:

• What can I do to make this modification work?
• Do you have any concerns about my request you’d like me to address?
• What can we do together to complete this modification?

Tip #6: Tell the Lender What You Want

Now is not the time to beat around the bush. If you want your interest rate lowered to 5%, say so. If you need a payment under $1,200 a month; tell them! If there was ever a time to know exactly what you need and communicate it, this is it!

Tip #7: Offer Several Options

Sure, you may want a 2% interest rate, but if you let your lender know you’ll take a 4.9% interest rate; or a term extension as long as your payments are less than $1,500, you’re more likely to get what you want. Show your lender that you’ve done your homework and know what you want and need by offering them several solutions. A few things you could ask for include:

• Freezing your current interest rate
• Lowering your interest rate
• Increasing the loan term
• Penalty forgiveness
• Forgiveness of a portion of the principle of the loan

By following these basic tips, you’ll be in a much better position to negotiate the new loan you both want – and need.

1. What is it? A home loan modification is a permanent change to the terms and conditions of the existing loan. This usually means that the lender will reduce the monthly payments through available options. These options may include a reduction of the interest rate, the extension of the term of the loan, elimination of accumulated fees, grace period, or any combination of the available options.

2. Who can apply? In order to apply for a home loan modification, you need to have a solid and serious reason showing that your household income has been drastically decreased and that you will not be able to pay the mortgage. Some examples of such a circumstance might be the loss of a partner, recent divorce or separation, loss of employment or conversion of an adjustable rate mortgage to a fixed one.

3. Is it necessary to hire someone to negotiate my loan modification? It is not necessary to hire a firm to apply for a home loan modification as you can apply for it yourself; however, you need to prepare and organize yourself beforehand. Agents and lawyers can charge you hefty amounts of money. However, it is advised that you go for representation if you do not know the process completely.

4. I have not missed any payment, am I still eligible? Yes, you can. However you have to show that you had unexpected expanses that will hamper your ability to pay your mortgage.

5. Can the government help me? Yes, it can. Actually the new Obama administration has announced a $75 billion worth of a relief package to assist lenders and buyer to modify home loans.

6. Does home loan modification require a credit check? No, a home loan modification does not require a credit check as your lender already has your credit history. It also requires less paper work than refinancing, which involved applying for a new loan. On the plus side, it is actually good for your credit report; once you’ve gone through the loan modification process and have had your debts forgiven, your credit report would show that you have actually been paying your payments on time.

7. Would I be successful? Lenders want to avoid foreclosure because they want to save themselves the time and effort of finding new borrowers and doing more paper work. If you present with a good reason, a strong serious hardship or a genuine circumstance you might succeed. Most successful hardships showed job loss for a loan mod.

8. Will my credit rating fall? No, your credit rating remains unaffected by a loan modification. It is actually better for your credit rating.

9. Would the lender add the late charges and arrears to the modified loan? Per the rules of the HUD, these arrears have to be relinquished and are seldom taken out by other means.

10. How will the lender forgive pass late payments and arrears? The past arrears may be added to the loan but placed over a period of time to make the loan more feasible to be paid easily.

Hopefully this article has answered some of your questions about loan modification, and made you more aware of the benefits of loan modification. If you have decided to modify your loan you will need to do more research about the subject. That is the biggest pitfall struggling homeowners don’t get the best results they can. They don’t do enough research and don’t understand the subject to well.

• Obtaining your modification package: Getting a loan modification package in the mail can take anywhere from a few days to a few weeks, depending on how long it takes for you to get a hold of the right loss mitigation manger, and of course, how many other modification requests being considered at the moment.

• Submission of the loan modification package: If you have taken the time to gather all of your financial information while you waited for your package to arrive, you should be able to fill it out and get it back to your lender within a few days.

• Underwriting your loan and internal auditing: Once your lender receives your modification package, they will check it over for mistakes, and then send it on for an in-depth review. Assuming that no questions arise regarding your paperwork, this should only take a few days.

• Assignment to a mitigation specialist: After being reviewed by the underwriters (which can take another week or two), your case will be assigned to a loss mitigation specialist who is authorized to make the final decisions regarding your loan modification request.

• Decision and mitigation process: One of the longest parts of the process, this step can take several weeks as your loss mitigation specialist reviews your request and begins negotiating new loan terms with you. It may take a week or two or even a month or two to complete – that really depends on the specialist’s case load.

• Completion of the new loan: Once your modification request is approved, your lender will send you a packet to fill out and sign within 3-5 business days to complete your modification.

As you can see, getting your loan modified can take several weeks to several months to complete. The key to getting what you want is being pro-active and patient, all at the same time.

You don’t need to hire an expensive firm to do your loan modification, on the contrary doing it yourself leads to better results and thousands of dollars saved. One such kit is 60 Minute loan modification. 60 Minute Loan Modification is very simple to follow and has helped multiple people stay in their house and avoid foreclosure.

Designed to explain how you got into your current financial crisis (and what you intended to do to get out of it – and stay out), the hardship letter can sometimes be the only thing that sets you apart from the hundreds of other loan modification requests sitting on a reviewer’s desk. That’s why it is so important to learn how to write one that will get noticed.

Knowing the right ways (and wrong ways) to write a hardship letter can make a big difference in convincing a lender to modify your loan. Remember, they are doing you a favor by even considering your request, so be polite and agreeable. Don’t gripe or complain in your letter, and don’t be so overly dramatic that it turns the reviewer off. Instead, opt for a simple explanation that tells them your situation in a genuine voice.

Do your best to keep your letter at a reasonable length (less than two pages). The average mortgage lender these days may receive hundreds of these requests a week and simply doesn’t have time to wade through pages and pages of explanations regarding why you find yourself behind in your payments. Respect their time and they’ll be more wiling to help.

Besides, by now they’ve heard just about every story imaginable; and the odds are you aren’t going to tell them anything new. Whatever excuse you can come up with probably won’t elicit much sympathy, no matter how creative you think your approach. Honestly and humbleness truly is your best tactic right now.

The absolute best (and most productive) hardship letters are short and truthful. They avoid going into too much detail, opting instead for a simple explanation and resolution request. Saying something as simple as “due to the recent interest rate readjustment on my mortgage and decreased hours at my job, I’m finding it difficult to keep up with my new higher payments,” may be all that’s necessary to get what you want. Lenders know how tough it is right now and they don’t need any lengthy explanations.

Still not completely sure how to write your own hardship letter? Here are a few simple guidelines to get you started: get started?

•While trying to keep your letter short, don’t risk being too vague. Be sure to include all necessary information and documents such as medical receipts; death certificates; unemployment notices; etc.
•Write with some feeling and emotion.
•Identify the reasons for your failure to keep up with your monthly payments, including any DATES which coincide with the delinquency period.
•Tell your lender what you want: a lower interest rate; a longer loan term; etc. You may even want to list a proposed monthly mortgage amount that you know you can handle.
•Show a willingness to work out an equitable solution – never be confrontational
•Be polite: always thank the lender for his/her time and consideration.
•Include your current contact information.
•Enclose bank statements from the past two months, late notices on your car, last year’s tax returns, and anything else you can find that can verify your financial state.

Of course there are a few things you should never put in a hardship letter, lest you risk turning the reviewer off:

•Details about your legal problems. The point of this letter is to make you look responsible, so don’t give your lender any reasons to think that you aren’t.
•Details of your impending divorce or other personal issues. If they are pertinent to your case, than only give the most basic information – and don’t editorialize!
•Any reasons you are overextended other than those which are out of your control such as a job loss; illness; death; interest readjustment, etc. Otherwise you may look like an irresponsible spendthrift.
•The fact that you will claim bankruptcy if they don’t approve your modification application. If they think they’ll lose money on your loan anyway, they won’t have any incentive to try and help you out.
•Any other threats of non payment. Banks don’t respond well to threats, so don’t even think of trying this approach.