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Karen Rockfeller's Articles in Personal Finance

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Is A Loan Modification Better Than A Refinance? The current economic pinch has everyone scrambling for the fastest and most manageable solution to their ever-growing financial problems. It almost goes without saying that most people will resort to mortagaging their homes just to try to make ends meet, seeing as how more and more people are now subscribing to the adage that desperate times call for desperate measures, In a manner of speaking, taking out a mortgage on one`s home could be seen as a desperate measure. But what does a homeowner do if, even after taking out a mortgage on their home, they are still in desperate need of money? Does the solution to this secondary crisis lie in a loan modification? Or will taking out a second mortgage be the solution to the problem? Get Your Piece of Obama`s Loan Modification Barack Obama has proposed and passed the Homeowner Affordability and Stability plan which is intended to help over 7 million Americans with loan modifications. The plan is a massive $75 billion, below is a brief summary of what you need to know to get a piece of the large pie and help you save your home from foreclosure. Making a Loan Modification Work You and your lender (or the lenders agent) entered into this transaction with your eyes wide open and both agreed to the terms of your mortgage. Right? With the possible exception of cases of fraud (which existed during the mortgage heydays and still goes on) you and your lender must also approach a mortgage modification with your eyes wide open and agree to a reduced payment or altered terms. It`s a voluntary process and believe it or not, the scales may be tipping to the borrowers side for now. Get Legal Advice on Loan Modification Because foreclosure is a harsh legal process, homeowners threatened with foreclosure should immediately obtain legal help. Possible sources of legal help are the neighborhood legal services office, a bar association panel of pro bono attorneys, or a program providing legal assistance for the elderly. A competent attorney can determine whether there are legal defenses to a foreclosure. Negotiate a Delay in Loan Payments One of the most important strategies today for homeowners in financial trouble is to work out with the lender a temporary delay in payments or a period of reduced payments. More and more creditors are realizing that foreclosure is a losing proposition for the lender, and that they are better off keeping the consumer in the home making whatever payments the household can afford.