A house becomes more than just a structure when you store precious memories in it and it becomes a part of your life. The house is then transformed into a home, your own place in the sun. That’s why he becomes very distressed when times get tough and he finds that the mortgage payments are becoming too much to handle. At this point, it’s wise to consider options for how he might keep his home during his financial hardship. One of the best ways is through loan modification.
Loan modification is primarily making a change to one or more terms of your existing loan. You and your lender agree on a way to make the monthly payments manageable enough to avoid foreclosure (this is when you lose your rights to the property).
You have to remember that banks and financial institutions are really not willing to force you to leave your house mainly because it becomes a total loss for them. With the real estate crisis still real, these agencies would rather find a way to keep you from giving up the property than add it to their inventory of unsold structures. Even the government is hell-bent on helping homeowners like you manage your mortgage payments because, by oversimplifying the big picture here, doing so helps the economy.
Of course, there are factors to consider before your loan modification application is approved. Although your lender technically doesn’t want to foreclose on your property, you also need to keep in mind that you’re running a business and you need to be sure that you too will benefit from the change in terms. Therefore, it is not surprising that they took a close look at the following, among many other things:
• What are the reasons for your mortgage problems?
• How much do you still owe?
• How much is your property really worth?
• Do you have or will you have the ability to pay once the loan is restructured?
In the worst case, the lender might suggest a short sale instead, which means the lender allows the property to be sold (to someone else) for less than the remaining balance on the home. This would release him from his obligations, but he would also lose his home. He doesn’t want this to happen, so the best way is to research his options, like applying for a loan modification, and seeking help, if needed.