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Loan Modification for People NOT behind on their payments

Is there such a thing?  Can you get some assistance on your mortgage simply because the value of your house has depreciated to a level that is less than what you owe?

The answer is a definitive “maybe!” – and might be worth checking out. There are two avenues that might prove fruitful. Both of these can researched by contacting your lender.

Here’s the scoop.

If your mortgage is backed by Fannie Mae or Freddie Mac, there is a program available to lenders enabling them to work with borrowers on loan modifications that will bring the principal amount of the mortgage within the confines of the current market value of the home. It is up to the individual lenders to utilize this program or not and to set the basic eligibility. There is no assurance that your lender will do this but – some are doing it and it could be worth your time to contact your lender to find out how this might apply to you.

The second option that could come into play depends on whether or not you have PMI (Private Mortgage Insurance) on your loan. It also depends on which PMI company your lender uses.  Some PMI companies are offering homeowners a program that will help them out in a situation where they owe more than the value of their home.  There are a few different ways they can help but – again, it will depend on the specific PMI company that you have.  You can find this information out by contacting your lender.

I have to reiterate again that the availability of both of these avenues is dependent on who your lender and your PMI company is and what their policy dictates.  The thing to keep in mind is that you don’t necessarily have to be behind to get help.  The theory is that the lenders and the insurance companies sometimes feel that it is in their best interest to help the home owner a little bit now, rather than incur the cost of a possible foreclosure down the line.

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