Conejo Valley Blog

We have a real problem in the housing market, affecting 30 million people in the USA. More and more home owners are losing their jobs, or having their salaries reduced. More and more people are falling behind with their credit card, mortgage or car repayments. These people are in danger of defaulting on their mortgage and seeing their home suffer foreclosure. But there is a solution, and many home-owners aren’t even aware of this solution: it’s referred to as loan modification - sometimes called loan mod.

Mortgage loan modification does not entail re-financing, so there is no credit check required. It doesn’t involve debt consolidation. What it is, is renegotiating the existing loan to affect a reduction in interest rate and, under certain conditions, a lowering in loan principal as well. And there is no increasing the term of the loan. A new, lower, payment is achieved which is sustainable to the homeowner. Loan modification is a true win-win solution for all parties concerned. To the homeowner it can mean the difference between keeping or losing their home. As for the banks, it might signify the difference between staying afloat or sinking.

There is no reason why home-owners cannot arrange their own loan modification by contacting the loss mitigation department at their bank. But it isn’t advisable - the banks will usually offer only an insignificant decrease in interst rate, or no reduction at all. It’s much better to use the services of an experienced loan modification firm, which employs its own team of loan modification lawyers, who do nothing but speak with banks all day long and have the knowledge and experience to attain a telling lowering. Going it alone is akin to representing oneself in a court of law - it’s seriously unadvisable. A reputable mortgage loan modification firm can negotiate 30% to 50% reductions in interest rate without an extension to the length of time of the loan. It’s well worth whatever fee they charge to achieve this.