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Mortgage Loan Modification Programs Come to the Rescue

DENVER, Colorado -- October 15, 2008 -- As the economic crisis reaches historical proportions and more Americans worry about how they will make their mortgage payments, many homeowners can count on substantial help from new loan modification programs.

A loan modification involves changing the terms of the original mortgage agreement in order to make it less burdensome on the borrower. Sheila Bair, head of the Federal Deposit Insurance Corporation (FDIC), has for many months been an outspoken advocate of a more aggressive approach to loan modifications to avoid foreclosure. Now she is putting her ideas into practice because the FDIC has been forced to takeover failing institutions such as IndyMac, a major subprime mortgage lending business that recently collapsed.

Bair's office is quickly modifying loans by doing such things as freezing interest rates, amortizing the loans over a longer period of time, or allowing homeowners to refinance even though they may have a small second mortgage that might otherwise prevent refinancing.

HUD is also getting into the act through the Federal Housing Administration (FHA). The FHA has been given expanded authority and about $300 billion in emergency federal funds to launch a loan modification and refinancing initiative meant to curb the foreclosure crisis.

Those banks and mortgage companies that agree to adjust the terms of existing loans to ensure that homeowners have at least 10 percent equity will be able to shift the threat of toxic loans by having consumers refinance into FHA-insured 30-year fixed-rate mortgages. In return for the help which is ultimately provided by American taxpayers homeowners will share any profits they might make if they decide to sell their homes rather than keeping them for the lifetime of the loans.

The proactive steps to intervene and save homeowners from foreclosure will have several potential benefits. They will keep families in their homes, save mortgage companies money because they stand to lose more if they have to foreclose, and also help to stabilize housing prices. Once the tide of foreclosures is reversed the real estate market will regain traction, and that should lead the rest of the economy to higher ground and a return to economic normalcy.

Those who hold mortgages and are having difficulty making monthly payments should talk to their lenders about the possibility of doing a loan modification. With added government support many banks and mortgage companies are now much more ready and willing to work with homeowners, and they can suggest creative ways to solve problems in a mutually beneficial way.

For more information, visit: http://www.GayRealEstate.com or http://www.GayMortgageLoans.com

Jeff Hammerberg, Founder & CEO
Denver, CO
Toll-Free: 1-888-420-MOVE(6683)


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