When the economy was stronger, refinancing to access cash from home equity was a common occurrence. Any adjustments to mortgages were done through refinancing; this was an easy solution at the time for any mortgage related problems. There seemed to be an infinite list of options when it came to refinancing and getting cash out of your house was a simple matter.
With the recent economic decline, people are finding themselves falling behind on their mortgages, facing foreclosure and refinancing for a lower payment is not an option. In fact, few people can get approval to refinance their homes. Because the resources have slimmed to a very small number, lenders have had to cut programs and apply stricter requirements on mortgages - both new and refinanced. Two main factors contributing to the reduction in refinancing programs are Wall Street not purchasing loans from the original lender and the government not guaranteeing to buy loans.
Fannie Mae, Freddie Mac, and the FHA are being taxed passed capacity and are not able to keep pace with the high demand for refinancing. In response to demands surpassing supply, underwriting criteria have been made harder to meet and money has been severely restricted. Anyone looking for a mortgage, either new or refinanced, must have proof of job stability, liquid assets, impeccable credit, and ample equity. Without these getting approved for a loan is approaching impossible. The most important element is equity, without it even the most well qualified buyers cannot refinance.
The new resource available to people who need help getting on top of their mortgage and avoid foreclosure is a home loan modification. Homeowners who are at risk of losing their homes through foreclosure because they can no longer keep up with the monthly payments may be able to stop the foreclosure by renegotiating their mortgage through a home loan modification. Due to the recent fall in the housing market, many homeowners find themselves owing more than their home is worth in addition to facing foreclosure. In these cases it may be possible to lower the principle balance through a home loan modification.
Lenders are tending to approve requests for home loan modifications, recognizing that keeping families in their homes benefits both the families and the lender. Approaching the lender with a well organized, well documented, and well stated proposal greatly improves the chances of having the home loan modification request approved. Even an excellent candidate will be turned down if their request is disorganized or missing information. Although pulling together all the needed documentation can be time consuming and sometimes difficult, it is well worth the effort if it means saving your home from foreclosure.
To prepare these critical documents you can use the Complete Loan Modification Kit which provides you with all the forms, document templates and an extensive how-to guide.
To learn more about the loan modification process please visit: http://www.foreclosuresmedic.com
Article Source: http://EzineArticles.com/?expert=Jonathan_Gillham
http://EzineArticles.com/?How-to-Avoid-Foreclosure-With-a-Home-Loan-Modification&id=2122447
About the Author
Frank is a loan modification specialist who has helped in the creation of a complete loan modification kit which is available at http://www.foreclosuresmedic.com
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