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August 17th, 2011 
Abraham King 
With so many homes being foreclosed on in recent years, with few signs of relief in sight, homeowners must educate themselves about the different ways they might be able to keep their homes by modifying their home loans.
There is a new government program, called the Home Affordable Modification Program, which can help qualified applicants. If your mortgage was created before January 2, 2009, you might be eligible for this program.
Other requirements that will determine if you qualify include:
- You are at risk of defaulting on your current loan
- You can prove financial hardship
- You currently reside in the home (vacant properties do not qualify)
- You have a variable rate mortgage
- You have reduced your interest rate within the guidelines of the loan program
- You can prove that a reduced loan payment will increase your cash flow
- The total of your first mortgage balance is less than $729,750our debt-to-income ratio is under a certain amount
You must provide tax returns for the two most recent years, proof of income showing that you will be able to afford to make the new mortgage payment, and a current bank statement and other related paperwork to show the need for modification and the ability to pay it.
Whether you decide to apply for a loan modification yourself, or use an attorney, be aware that the process can take three months or more. There are numerous rules and regulations to learn about; many homeowners choose to leave the loan application process to an attorney who can wade through all of the complicated, detailed rules and laws which need to be navigated. There are foreclosure attorneys who can also be effective advocates, since they are experts and can work with loan officers to get the best deal on behalf of the homeowner. Foreclosure attorneys often use their specific, detailed knowledge as leverage to get you better terms and rates.
There are many ways to find a loan modification that works best for you. There are many loan modification companies offering help for homeowners, but check to be sure that you are dealing with a reputable company. Check with the Better Business Bureau and ask previous clients about their experiences if you are able to, so you get the best help possible. Never pay an upfront fee for loan modification services, except for an attorney retainer fee. In addition, remember that no legitimate loan company would promise to get your home loan modified. Only banks can make such promises.
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