Thousands of men and women in United Kingdom are, in the recent
period, afraid of the menacing foreclosures. Despite the situation being so,
homeowners should brave the crisis with whatever options available to them.
Loan modification refers to measures which the homeowners under the terror of
foreclosures should consider as the perfect kind of solution. The time is also
not in favor of the financial institutions because of which they have been
experiencing tougher competition in the finance market. They are to find out
area of investment so that they can live healthy and they can live longer. This
is why finance providers are not reluctant to support the debt-trapped people
who have chances to lose their home.
Loan modification provides several options to the homeowners in crisis, but it
is to be ascertained at first if a person is eligible for a . The
finance providers select an option on the basis of why and how the person has
satisfied the eligibility criteria. The person concerned should write a letter,
a hardship letter it is called, to the finance provider, a letter which would
necessarily contain the reasons behind his hardship. Loss of job because of
retrenchment/lay off/ closure, accident in the working place making one
disable, accidents of any other kinds, miss-management of earning due to
extravagant lifestyle and many other factors may be the reasons behind
A few of the options available in loan modification have been submitted in the
1. Rates of interest for the finance offered to the homeowner are lowered as a
result of which amount for monthly installment is also lowered. There is a
rider in this case. This will produce huge payment to the end of one’s
2. Running mortgage program of the borrower can be stretched as a result of
which mortgage payment will be bearably lowered.
3. Mortgage payment is also lowered if the principle is allowed to get
4. Rates of interest are fixed and made adjustable. The borrower is allowed to
opt for the lower rates when there is fluctuation in the rates of interest in
5. Sometimes, arrears and fines are forgiven under special context.
6. The borrower is allowed a break from payment for 3 to 6 years. This will
create very large outstanding at the end, no doubt.
7. Forensic audit is another option for loan modification. Professionally
expert consultants acquire all the documents of receipts and payments from the
borrower and verify first if the financial accounts causing the hardship are
free from errors. If there are wrong entries, corrections are made. Sometimes,
the borrowers are helped. The borrowers can also find a finance provider who
will be ready to offer the total outstanding at affordable rates and
installments so that they find relief from the earlier lenders.
The borrowers should seriously study the options and process of loan
modification before they decide to go for it.
George Thomas is Loan Modification Officer. For more information about ,