Loan Modification

Loan Modification Programs

Loan modification programs can be a great way to save a home from foreclosure for homeowners in a financially distressed situation. It can be a difficult process however with so many different programs and options available. Individuals should consider exploring all of their loan modification options prior deciding on a selection.

Loan modification programs can be offered by private institutions, the Federal Housing Finance Agency, Federal Deposit Insurance Corporation and Federal Housing Administration. These programs may vary based upon what the homeowner is trying to accomplish. Some programs may try to reduce monthly payments while others may reduce interest.

Loan Modification Programs From Federal Agencies

Loan modification programs from Federal agencies were offered by the Obama administration through the Making Home Affordable Program (MHA) to help the U.S. market recover from the burst of the housing bubble. The Making Home Affordable Program often provides mortgage relief through loan modifications to help homeowners in financial duress avoid losing their homes to foreclosure. MHA programs include several types of loan modification programs to help homeowners in varying degrees of financial difficulty.

Lowering Monthly Mortgage Payments with Federal Loan Modification Programs

Federal loan modification programs to lower monthly payments are geared towards helping to lower the monthly mortgage payments so that homeowners can increase their monthly savings. These types of programs can be great for homeowners with an underwater mortgage who are having a difficult time affording their monthly mortgage payment.

These programs may help to reduce monthly mortgage payments:

  • USDA’s Special Loan Servicing
  • Principal Reduction Alternative (PRA)
  • Second Lien Modification Program (2MP)
  • Home Affordable Modification Program (HAMP)
  • Veteran’s Affairs Home Affordable Modification (VA-HAMP)
  • FHA Home Affordable Modification Program (FHA-HAMP)

Reducing Interest with Federal Loan Modification Programs

Federal loan modification programs to reduce interest are geared towards helping homeowners to save money in the long term by taking advantage of the housing industry’s currently low interest rates. Homeowners may be able to tap into a more affordable fixed-rate mortgage.

These programs may help to lower mortgage interest rates:

  • Home Affordable Refinance Program (HARP)
  • FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)

Private Institution Loan Modification Programs

Private institution loan modification programs can be offered by a large number of private banking institutions. A large number of these programs became more widely available to financially distressed homeowners after the National Mortgage Settlement. Homeowners may want to consider these options if they cannot qualify for any Federal loan modification programs.

Loan modification programs may be offered by these private banking institutions:

  • Bank of America
  • CitiMortgage
  • JP Morgan
  • Wells Fargo