WABroker

More homeowners are facing foreclosure than ever before. Many are seeking stop foreclosure help. Recently, the Home Affordable Modification Program was launched in order to alleviate the financial strain on homeowners by helping them obtain loan modifications.

A loan modification is supposed to help homeowners stay in their homes during a difficult financial time by reducing their monthly mortgage payments. Homeowners who have lost some of their income may try to obtain a permanent loan modification. However, loan modification is far from a saving grace for many homeowners.

Some homeowners who apply for a loan modification are granted a temporary loan modification. At the end of the trial period, the lender will decide to grant the homeowner a permanent loan modification or begin the foreclosure process if the homeowner still cannot afford the monthly mortgage payments. Homeowners who are later denied a permanent modification, will have to pay their lender past due payments for the time the temporary loan mod was in place. Under the HAMP program, you cannot reapply for loan modification, once you have been denied.

Permanent modification provides little more help to struggling homeowners.
First of all, a permanent loan modification lasts for a total of five years.
Loan modification does not reduce the principle on the loan; it merely extends the length of the loan (making a 30 year loan into a 40 year loan in some cases).
In addition, a homeowner who is granted a loan modification must pay arrearages, or back owed payments from the time the loan mod was in place.

Whether temporary or permanent, loan modification often gives homeowners a false sense of hope. Lenders often take the last of a desperate homeowner's savings through loan modification, bringing them closer to foreclosure.

For more information about preventing foreclosure, get your FREE copy of "7 Foreclosure Facts Your Bank Will Never Tell You."