Loan Programs Help Tri-City Homeowners Avoid House Repos
The economies of Pasco, Richland and Kennewick in Washington were able to survive the worst of the national recession. But because the impact of unemployment is so widespread, many homeowners found themselves struggling to pay their mortgage payments and in danger of house repos.
The federal loan modification under the Making Home Affordable program of the Obama Administration has helped many homeowners in the Tri-City remain in their distressed properties.
Loan modifications involve changing the length or terms of the troubled mortgage to make monthly payments affordable and easy on the pocket of financially-strapped homeowners. The program introduced by the Obama Administration is designed to help as many as 9 million distressed homeowners modify or refinance their loans to affordable terms.
Nationwide, the program has already modified about 230,000 troubled loans. The federal government said that the modification initiative is on the track to help about 3 to 4 million borrowers in three years time.
Consumer Credit Counseling Service housing program director Liza Beam said that the modification program has helped many distressed homeowners remain in their properties. But she pointed out that despite the willingness of lenders to help homeowners, they are behind on their loan modification efforts. She added that the process for loan modification typically takes as long as six months.
Since October, the CCCS was able to help 70 homeowners who have trouble with their loan payments. The CCCS is certified by the U.S. Housing and Urban Development (HUD) to provide loan counseling services.
According to industry experts, many mortgage companies are now lenient when it comes to modifying troubled loans. Previously, homeowners should be 3 months or more delayed on their mortgage payments before mortgage companies would start making changes.
Some mortgage companies offer various forms of modifications. Homeowners can opt for forbearance which would allow lenders to divide the total missed payments to be paid incrementally on top of regular payments. Some lenders also modify troubled loans by reducing interest rates or extending the length of the mortgage loan.
Another way to reduce monthly payments is to file for partial claim. This method involves mortgage companies allowing homeowners to pay a portion of the principal and interest, deferring the remaining due amount until such time that the distressed property is sold.
