When a homeowner is unable to pay the mortgage and gets so far behind that the bank has to foreclose, nobody wins. In fact, both the homeowner and the lender lose. The homeowner is forced out of his or her home and the lender loses money on the mortgage. That's why loan modifications should always be considered before it's too late. Here are 5 reasons why loan modifications are a perfect solution.
The Family Stays in the Home
The worst part about a mortgage default and a foreclosure is that a family loses their home. This puts the family out on the streets and it often results in marriages ending in divorce. With a loan modification the family gets to stay in their home and the financial pressure and financial failure that so often tears families apart is lessened or even removed.
The Lender Gets its Money
The next reason why loan modifications are a perfect solution is because the lender gets to make its money. When a foreclosure occurs, the lender never makes its money back. A loan modification allows the lender to continue to get a monthly payment and to eventually make money off of the deal.
The House Stays off the Market
The next reason why a loan modification is a perfect solution is because the home stays off the market. One of the major reasons for the current housing crisis is because there are too many houses on the market and the value of each home is dropping through the floor. With a loan modification the house stays off the market, which will help the overall condition of the economy.
Loan Modifications Don't Cost Taxpayers a Dime
Often when a family loses their home, they wind-up needing some government assistance in some way. With loan modifications the family gets to stay in their home and they can continue to support themselves without relying on taxpayers for assistance. Also, every time a bank has to foreclose that bank loses money. Too many foreclosures coupled with the devaluing of homes has caused many banks to request and get a bail out from the tax payers. If more people stay in their homes, the banks will lose less money and not need any help from taxpayers.
Loan Modifications can be Quick and Easy
The final reason why loan modifications are a perfect solution is because they are usually quick and easy to set-up. The average time for most loan modifications is 30-90 days. There are criteria that must be met, and a process to be followed, but a loan modification can be offer a timely solution to a very serious situation for many homeowners. The assistance of a loan modification specialist to negotiate with the lender can facilitate the process for the homeowner.
There you have 5 reasons why loan modifications can be a perfect solution for any homeowner struggling to make their mortgage payments. Any homeowner who is struggling to make the mortgage payment should look into possibly getting a loan modification.
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