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Loan Modification Foreclosure: Are You Eligible To Apply?

By: John Stuart Smith|LRL Writer

Loan Modification AgreementAll over the world, economies are experiencing a slowdown in growth, or worse, negative growth. The United States economy in particular was hit badly by the global recession. The current economic situation of the United States aggravated the status of many pending loans, driving many Americans into financial disarray. Many companies retrenched employees because of rising overhead costs. Because of lower wages, sudden unemployment, and rising debt, many people risk loan foreclosure because of their financial inability to comply with their monthly loan payments.

The situation is further worsened by the poor performance of the housing market, which has resulted to a sharp drop in home value and escalating mortgage payment rates. Homeowners with ongoing mortgage agreements are the most vulnerable to foreclosure, and are placed at a great risk of losing their homes. Because of this, the practice of loan modification foreclosure has been developed to help homeowners cope up with their monthly loan payments. If you are at risk of foreclosure, it's important to know how to apply for a loan modification foreclosure.

Eligibility for loan modification starts with an assessment of your present financial situation. How much is your income? Do you have savings in your bank? How much do you spend for daily expenses? Such probing questions are included in the financial inquiry. The government will also look into the details of your current employment, such as salary received and job performance. If you are unemployed, different assessment guidelines are followed, and any source of income is put into consideration instead. Your loaning practices will also be scrutinized, such as outstanding balance of your credit card and mortgage. If the result of the inquiries supports your request for loan modification foreclosure, your home lender will have to comply by modifying the mortgage agreement and setting your monthly payments at lower rates. The amount reduced in your monthly payments and the duration in which this will be implemented is determined by your present income.

The process of loan modification foreclosure is currently being encouraged by the federal government in an effort to save debt-ridden Americans from losing their homes. With support from Congress, the government has injected billions of dollars into the housing industry, enabling home lenders to offer much-needed lower monthly payment rates to homeowners. Hopefully, this trend will help Americans keep their homes and survive the economic depression. In the future, when the economy has finally stabilized, many Americans will look back and thank the government and home lenders for offering loan modification during the time they needed it most.

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