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Loan Modifications Short Guide To Success Part 2 ? The Guide

By Andrew

Loan Modifications are not providing the help American homeowners need. Of the millions of troubled borrowers only a small percentage qualify for a loan modification trial and most of the lucky ones get stranded in the way.

This article will provide you with a list of simple steps that will increase your chances of getting a permanent loan modification.

The number  one reason why loan modifications don?t work.

Before we get into the practicalities of how to find your way through the maze of loan modifications it is worth spending a few words on the top reason why loan modifications are not working: They Don?t Address the Real Problem.

The real problem is unemployment and the Credit Crisis.

The fastest growing demographic for loan modification are prime mortgages. These are good mortgages, bought by borrowers with high credit scores that can?t pay their mortgage because of the increasing rate in unemployment. Unemployed borrowers struggle to get a loan modification because you can only qualify if you can prove you have nine months of unemployment benefits lined up. Most unemployed borrowers are unlikely to fulfill this requirement.

The other big reason loan modifications might not work for you is that your mortgage might be the least of your credit problems, you might be overstretched on your car loan, credit card loan, and other personal loans. Many commentators feel the government is trying to deal with a Mortgage Crisis when what they should be dealing with is the broader Credit Crisis.

First Step. Get the Information You Need.

Visit the government?s official website at www.makinghomeaffordable.gov . There you can find:

1)      The current sponsored program the Government is touting.

2)      Useful forms to help you compile the information you need to supply to lenders.

3)      Find the closest government paid advisor that can provide you with personalized guidance.

Second Step. Decide what you can pay, and be realistic about it.

There is such a thing as a BAD LOAN MODIFICATION. After months of wasted time and resources some borrowers end up with a loan modification they still can?t pay.

You need to figure out what you can truly afford to pay on your mortgage every month. The government guideline is 31% of your monthly income but that might not work for you. Get some real figures together. How much do you spend on housing costs? What is your income, or average income if you?re self employed or work on commission. Put all this on paper, your lender will want a look at it.

Related posts:

1. Loan Modifications Short Guide To Success Part 1 ? The Problems
2. U.S Loan Modifications Hit Obama?s target Early But Nobody?s Impressed
3. Loan Modification Success Report, The Truth Is Far Worse

Related posts:

1. Loan Modifications Short Guide To Success Part 1 ? The Problems
2. U.S Loan Modifications Hit Obama?s target Early But Nobody?s Impressed
3. Loan Modification Success Report, The Truth Is Far Worse

Full post as published by Blown Mortgage on December 11, 2009 (boomark / email).