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Stop Foreclosure through the Principal Reduction Program

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By : John Cutts    99 or more times read
Homeowners often find themselves in a situation where their mortgage balance is higher than the actual worth of their home. Often, this results to homeowners losing interest in paying their loans to stop foreclosure.

One way to solve this problem and stop foreclosure is through mortgage loan modification. Under loan modification programs, homeowners are given the option of principal reduction. Under this system, the mortgage balance is adjusted to match the present market value of a property.

Principal reduction is not available for everyone, though. There are certain requirements that have to be met before a borrower can qualify for the program. Some requirements are:

  • The mortgaged property is the principal residence. The program prioritizes borrowers who need to stop foreclosure because they actually live in the property and does not only use the property as investment.

  • The borrower is delinquent on payments by a minimum of 60 days.

  • The monthly income of the borrower qualifies under particular approval guidelines.

  • For borrowers who are not presently delinquent but wish to stop foreclosure just as well, they can likewise qualify if they show inability to pay mortgage because of a trigger event like loss of employment or earnings. However, they must be able to prove that under the lower rates, they can regularly make payments. Also, necessary documents that will prove the aforementioned conditions have to be submitted.

Though not all homeowners can apply for the principal foreclosures reduction program, it will definitely provide assistance for those who are qualified. It is a big step for those who wish to stop foreclosure.

Some of the banks which are planning on offering the program are Bank of America Countrywide and Citigroup.

For those who want to know more about the program, they can download The Complete Loan Modification Guide. The handbook is affordable and comprehensive all you have to know about loan modification can be found in the handbook.

A foreclosure situation does not have to be hopeless. There is always help available for those who need it. Homeowners just have to explore their options in order to stop foreclosure.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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