Stop Foreclosure – Foreclosure Prevention

Loan modification program is a plan under which your loan modifies according terms and conditions of the program and it depend on your eligibility of the plan. There are many loan modification programs under which you are eligible can modify your loan.
Trying to apply for loan modification but confused about which program you apply for, then here are some of the guidelines to help you decide the loan modification programs.
1) Loan modification programs for principal reduction: this is possible when you owe more on mortgage than actually what your home worth. This is not the situation of you alone, last year the value of homes declined incredibly, destroying the home equity of homeowner around the world. But when you default on your mortgage and fall being your payments because of financial crisis, due to job loss, accident to family member, death of an earning member etc. could be the possible reasons to fall behind the payments. The banks has no option to recover their amount of loan mortgage when you default payment other than foreclose your home. But what happens if your home equity is less than the mortgage you owe. If the lender thinks that he may loss more with foreclose than with loan modification, here is when the banks advises for loan modification. Generally principle reduction loan modification is advisable when the home equity falls 25% below your mortgage.
The eligibility for principal reduction:
1) The house should be your primary home.
2) You need to show your income proof, so that you can pay lower amount with out
any further default.
3) You must be at least 60 days behind with your payments
4) Or able to prove your financial hardship.
2) Loan modification with federal bailout: the federal government has designed two helpful bailout plans. First, mortgage loan modification: if you are already behind the mortgage payments, you are at risk of foreclosure. In order to escape the foreclosure you must qualify for the federal bail out plan. The requirement of the fedral bail out plan is:
1) Your mortgage should be your primary residence
2) You need to submit updated tax returns and proof of income.
3) The mortgage must be taken before January 1 2009.
4) Your first mortgage should be below $729500
5) If your household debt exceed 55% of your regular income and under go credit counseling.
6) You need to submit financial hardship letter signed by yourself
The advantages of this federal loan modification program are:
1) Your monthly payments can come down by 31% of you monthly income.
2) A low interest rate
3) No loan modification fee as they are taken care by the government
Learn more about Obama federal loan modification program and other loan modification offers by the bank individually

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