Loan Modifications and foreclosures

The impact of loan modification efforts on foreclosures appears to have been devastating to homeowners. Case in point: many, if not most modifications attempts result in denials, even when the homeowner has made all the payments!
Increased loans balances:
Unbeknown to many, the temporary reduction in payments, i.e. the shortage, is added to the principal. The homeowner ends up owing more than when he started the program due to the accumulation of unpaid interest.
Damaged credit:
Another unforeseen negative side effect of the attempted modification is the lender reporting late payments to the credit bureaus during the trial period. For example, if the trial modification lasts five months, the loan will be reported late during that period. This in effect destroys the homeowner's credit.
Foreclosures:
Failed attempts to modify loans in some cases are followed by notices of default. This is directly related to the reporting: once the loan becomes delinquent, foreclosure proceedings begin.
What should an underwater homeowner, who is current with his payments do?
The logical answer is to hire a company that will negotiate a principal reduction, and secure a refinancing with another lender. This option gives the homeowner the possibility to deal with the lender while he is in good standing. Once the mortgage is reported late during the trial modification, all hopes are dashed.
For more information about short pay-off negotiation and refinance, visit www.p2funding.com, or call 312-373-0750.