Stop Foreclosure with a Loan Modification

Sylvia Alayon, vice president of operations for the Consumer Mortgage Audit Center, predicts there will be a new wave of foreclosures as financing becomes tough, unemployment remains high, and the ability to reduce adjustable rate mortgage (ARM) loans becomes more difficult.

If you have an ARM loan that has adjusted higher and you can no longer afford the payments, you have options other than simply allowing your home to go into foreclosure.  Some options Alayon suggests include:

• A loan modification: Through a loan modification, you may be able to renegotiate the terms of your mortgage loan to reduce the interest rate, reduce the principal balance, extend the terms of the loan, switch from an adjustable rate to a fixed rate, or to set up a payment schedule to pay back any interest owed.
• Speak with an attorney. Many attorneys who specialize in foreclosure and loan modifications offer free consultations, and can provide you with valuable advice you can use to save your home.  If you schedule an appointment with an attorney, make sure you have the appropriate documents and paperwork prepared.
• Contact Neighborhood Assistance Corporation of America (NACA). This is a non-profit advocacy group that offers loan modification services for free (for those who qualify).

If you have an adjustable rate mortgage and you are concerned about affording the monthly payments, click here to find a foreclosure defense lawyer who can help you apply for a loan modification.