I've had a few people ask me what they should do to avoid foreclosure on their home. One option is to request a loan modification. Here's what Yahoo has to say about this method:
A loan modification is a change in the loan contract agreed to by the lender and the borrower. The modifications of major concern today are those designed to reduce the payment burden on borrowers faced with impending rate increases that will make the mortgage payment unaffordable to them. Many are subprime borrowers.
Home owners faced with this prospect, whether they are already delinquent or not, should request a modification. They are very unlikely to get one if they don't ask, and they should make the investment required to make their case. The stakes are very high: They can save their house and their credit.
The piece goes on to give details of how to do this -- and it's followed up with a part 2 for more information. If you're in the situation described above, you'll probably benefit greatly from checking out these pieces.
For those of you looking for other housing related pieces, here are some of my favorites:
A very good and timely piece. However, although the focus here is on mortgages, I would emphasize that "loan modification" may be possible for all kinds of debt. The point being that you should not accept the status quo, but talking with your lender to see if you can get more favorable terms for any / all debt.
Posted by: pfodyssey | November 19, 2007 at 03:54 PM