The National association of Bankruptcy attorneys recently issued a report that focused on mortgage modifications.  Their overall assessment of the situation was that aid is not reaching the struggling homeowner. They also stated that in many cases, the modifications that were made backfired on the homeowner. The report expressed the following points:

• When loan modifications are written, fewer than one in 10 of them result in a reduced principal loan balance.

• More than half of loan modifications roll unpaid interest and fees into larger, more drawn-out debt on the back end of the mortgage.

• Only 35 percent of mortgage modifications reduce monthly payment burdens for homeowners.

• A full 45 percent of loan modifications are packaged with increased payments.

The NACBA stated that the failure of loan modifications could be attributed to a lack of proper negotiations between the lender and the home owner. They predict that upwards of 8 million homes will be foreclosed in the next four years if legal action is not taken to avoid this national

"Despite a proliferation of voluntary programs, we are not seeing evidence of a meaningful number of sustainable loan modifications," said the NACBA.

In December 2008, the State Foreclosure Prevention Working Group, an organization consisting of Attorney Generals and state banking departments, reported that 80 percent of seriously delinquent borrowers were not on track for any loss mitigation option.

"The number of homeowners working toward a loan modification has declined by 28 percent... falling to a level not seen since late in 2007," the group reported.

With so many potential foreclosures why are so few people seeking mortgage modifications?

The general consensus is that since mortgage modifications can be so complex, and such a 'gray' area, most people are intimidated out of even making an attempt to resolve their delinquency. What the average distressed homeowner does not realize is that there are legitimate resources for negotiating a mortgage modification.

Many people have been convinced that there is no where to turn and while they realize they need someone to talk them through the process, they have been deceived by the media and politicians into thinking that they do not need professional help, that they can resolve a modification by themselves.

 

The news and administration have encouraged distressed homeowners to turn to 1-877-Get-Hope begin_of_the_skype_highlighting              1-877-Get-Hope      end_of_the_skype_highlighting, or other services, that frankly are not helping. Compound this fact with the huge amount of scams that have been revealed and you can see that the average homeowner has been confused and only further distressed. These scams have preyed on helpless homeowners by convincing them that they can help but are only looking for upfront fees. Once they have the home owners money they run.

What needs to occur is that there need to be placed awareness on the legitimate modification experts that are trained to negotiate realistic modifications. The public needs to be made aware of these agencies that will represent them and assure that they receive mortgage modification terms they can live with.

What exactly will a legitimate negotiation agency do?

• They will provide representation to the distressed homeowner, in mortgage modifications. Preventing the homeowner from being forced to face the loan agency undefended.

• They will provide a free upfront review of their financial situation and determine if the homeowner has a situation that can be avoided.

• They will field the hassling phone calls.

• They will not accept the first offer the loan agency provides.

 It is this initial offer in modifications that is has been creating the statistics that we mentioned above. Chances are if more people had council in these negotiations then perhaps more realistic terms would have been met between the lender and the home owner. Terms the home owner could actually afford to pay. Rather than the terms that have been being created by lenders that in many cases only speed up the process of foreclosure.

What finance options does a distressed homeowner have?

• Lower and locked in the interest rates.

• Extending the terms of the loan.

• A reduction in principal.

• Deferred payments added to back of the account balance.

Do not allow yourself to become part of the statistics find legitimate representation and proceed with a mortgage modification with your lender. Know your options and be educated. You do still have a chance of avoiding foreclosure.

Discover how you can ethically modify your home mortgage loan and save as much as 47% off your current mortgage payment in as little as 60 days without refinancing? For your FREE CD, FREE e-book, and FREE coaching call with Mortgage Modification Expert and Business Man of the Year Billy Alvaro visit our website Saint Jude's Mortgage Rescue