Can You Get a Loan Modification From Two Lenders?
You're struggling to pay not just one but two mortgage loans on your principal residence. You know you need a mortgage modification, a strategy in which your mortgage lender will modify your home loan so that you are left with a smaller mortgage payment each month. The challenge, though, is that two different lenders hold your mortgages: one your first loan, another your second. To nab an affordable monthly payment, you'll have to convince both lenders to grant you modifications. The federal government can help you achieve this goal.
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Home Affordable Modification Program
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The government's Home Affordable Modification Program has a lofty goal of reducing the number of foreclosures. Through this program, lenders receive payments every time they modify the mortgage loans of homeowners who can't afford them. Lenders can reduce your mortgage payment through this program in one of several ways: By revamping the terms of your mortgage loan, forgiving your principal balance or reducing your interest rate.
The Process
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The Home Affordable Modification Program only covers first mortgage loans. To start the process, you'll have to contact your mortgage lender and convince the company that you've suffered a serious enough financial setback -- such as a job loss, reduction in working hours or serious injury that has kept you from working. You'll also have to meet certain other requirements. You must have taken out your mortgage loan on or before Jan. 1, 2009. You must owe $729,750 or less on your loan. And your monthly mortgage payment must equal 31 percent or more of your gross monthly income.
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Help for Second Home Loans
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The Home Affordable Modification Program only helps homeowners who are struggling to make the payments on their first, or primary, mortgage loans. But many homeowners have second loans, as well, and they need to reduce the payments on both to be able to stay in their homes. This is why the federal government also offers the Second Lien Modification Program, a program that helps homeowners reduce the payments on their second home loans.
Second Lien Modification Program
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To qualify for a modification of your second home loan under the Second Lien Modification Program, you must first complete a modification of your first mortgage loan through the Home Affordable Modification Program. You must also owe at least $5,000 on your second home loan and have a second monthly mortgage payment of at least $100.
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