Stop home foreclosure through a loan modification

Whether you are behind on your mortgage or not, you can stop home foreclosure with loan modification programs

A home foreclosure can have significant long-term consequences for you. You lose the equity in your home and gain a poor credit report. If you want to stop home foreclosure , loan modification presents the best chance of doing so. Before seeking a loan modification, there are a few things you should know.

A mortgage modification is a process by which the basic terms of your mortgage are changed to reduce your monthly payments. Most modifications involve either lengthening the loan or lowering the interest on the loan in order to drive down the payment amounts. You can get a loan modification through your lender or loan servicer, or through the federal Home Affordable Modification Program (HAMP).

There is no need to wait until you get a notice of foreclosure. You can apply for a home loan modification at any time. To receive a modification, you must show that you cannot make your payments or may soon be unable to make them. To prove this, you will need to submit a financial package to your lender or the federal representative working on your HAMP application.

There are several reasons your lender will allow you to seek a loan modification. An increased interest rate, reduced income, medical emergency or drop in your home value are all reasons you may seek a modification. If you are worried about making your mortgage payments on time, don't wait until you miss one to research mortgage modification programs.

If the foreclosure process has already begun, you can still apply for a loan modification in order to stop the foreclosure. You will have 30 days to respond to your lender, stating that you wish to modify the loan terms. After receiving your response, your lender must notify you of your eligibility for a modification within 45 days. If the lender or servicer denies your modification request, the denial must be accompanied with an explanation telling you why. Mortgages that are insured or owned by Freddie Mac or Fannie Mae must be evaluated for loan modification your lender according to the Home Affordable Modification Program.

A federal housing counselor may improve your chances getting a modification, even if your lender has declined this request. To research your home's value to see if you qualify for certain modification programs, go to RealtyNow now.