What is Loan Modification and How can it help Families avoid Foreclosure?

There is help for those who have lost income and have fallen behind on their mortgage. There are many banks that will work with people and help them avoid foreclosure with a home mortgage loan modification. In this article I share our story of how we saved our home through loan modification.

Here is our story...

In early 2008 my husband and I began to see a substantial drop in our income and realized very quickly that we were in financial trouble. This dying economy hit our wallets hard. My husband who is in the sales industry and observed as his income began to go down as less potential customers came in the door. And I was forced to close down my home business and get a "job". Over the next year even though we were both working our butts off, we saw our income drop by $1500.00 a month.

We were in serious financial trouble. Unfortunately we fell behind on our home mortgage. This was very frustrating and humiliating for us, because prior we had never been late on our payments. We would actually even pay the mortgage a few weeks a head. This was very scary for us as we saw or savings disappear.

With the rise of unemployment in the United States and a Recession, many people are finding it more difficult to pay their bills on time. And Many people find after months of struggling an additional late fees it becomes harder and harder to pay their bills. And they fall behind. Because of this more people are finding themselves in the position of having their home foreclosed on. But foreclosure isn't the only option. Many people are staying in the homes they love because they were able to Modify their mortgage.

A loan Modification is when a bank lowers the lenders monthly payments to make them more affordable for the lender.

Why would a bank do this? Well its a win win for both parties.

The alternatives (foreclosure, bankruptcy) is a bad option for both to you and your lender. Your credit will suffer, and there’s a financial cost to the bank.

Often Loan Modification is a good option.

Our bank suggested we do a short sale or simply sell since our mortgage was now more then we could afford. But this was our dream house and we knew that we would be upside down anyway since the real estate market was so bad.

That is when we started researching our options and discovered Loan Modification.

Through loan modification we were able to get our payment lowered by $800.00 a month. This was a huge help for us. We have been able to catch our breath and now we see the light at the end of the tunnel.