Talk show superstar Oprah Winfrey recently showcased several families facing foreclosure on her show. The stories ranged from single parents unable to make ends meet to homeowners unable to find jobs in this suffering economy. Will.i.am, member of music group The Black Eyed Peas, offered to pay off the mortgages of these guests, answering their prayers for help.
Individuals facing foreclosure who are unable to gain the sympathy of a famous musician or talk show host are urged to investigate other options of foreclosure avoidance. Home loan modifications can save homeowners from foreclosure by adjusting the terms of their original mortgage contracts so that monthly payments are lowered to a rate that can be agreed to by both borrower and lender.
Borrowers facing foreclosure are urged to attempt a loan modification before other foreclosure options, because home loan modifications carry some of the fewest consequences for homeowners. In most cases, home loan modifications will not affect a person’s credit score. If the loan modification is requested after a loan has fallen into default, the missed payments will show up on and lower a person’s credit score, but the actual modification will not. This is why a person should keep their lender in the loop of trouble seems possible in the near future. Home loan modifications can be considered before a loan falls into default if lender policies allow for such an action or if the borrower is able to present enough evidence of impending financial doom (i.e., the borrower has been laid off and only has enough money in their savings account to stay current with payments for a limited amount of time). Individuals facing foreclosure are advised to consult with a local real estate / financial attorney prior to requesting the modification because the attorney can assist their client in preparing the necessary documents in the proper and most effective manner. On top of increasing the odds that a modification request will be successful the first time around, the attorney can help their client pursue their options if the request fails.
Options to home loan modifications that carry acceptable consequences for many homeowners include a short sale of the property, bankruptcy, and deed in lieu of foreclosure. To determine which option carries the most acceptable consequences for the individual homeowner, an attorney can be consulted to review the facts of a person’s current and past financial situation. Having an attorney guide a homeowner to their best option can save the homeowner unnecessary loss and heart ache in the future. The homeowner should take into consideration that each option after requests for home loan modifications have failed can have different impacts on future plans. This is why making the right choice is so important.
For those who would like to try their luck on Oprah’s show, feel free to contact show producers by following the below link: