Modify Your Mortgage and Keep Your Credit Score!
Posted on | November 4, 2009 | No Comments
Many Americans are struggling to make that monthly mortgage payment as they have gotten themselves into expensive homes that can now not afford. There is nearly no solution to this problem other than to foreclose on your home, or modify your mortgage. Foreclose leaves you without a home and damaged credit, but where does mortgage modification leave you?
Most would assume that modifying your mortgage is nearly impossible with the state of today’s economy, and that it would damage your credit greatly. However, this has slowly proven to not be true.
Produced by the Consume Data Industry Association, it is not possible for American’s to modify their mortgages under “loan modified under a federal government plan”, in order to not ruin their credit. The hope is that more Americans will choose this option over foreclosure.
Currently 20 out of 90 million home owners owe more money on their home loan that what their home is actually worth. Clearly, this would make one think that no bank would allow these borrows to modify their loans as they are already in a huge amount of debt. However, in the current economic state I think it is safe to say, anything is possible.
Currently the offer is as follows: If a home owner can manage to pay their mortgage on time for 3 straight months, the bank will consider making an arrangement to reduce monthly payments. Once this arrangement has been made the borrow must continue to prove that they can make these payments on time, and then the bank will consider allowing this reduced payment for up to 5 years, with no damage to the borrower’s credit score.
With the housing market in such bad condition, the hope is that by allowing these reduced payments those who are indeed behind on their mortgages will get a chance to catch up, keep their homes, and have no damage done to their credit.
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Author: Sylvia Wayne
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