Dear MortgageMaster,
I was told by someone that couldn't make their payments and were behind on their mortgage that they called the lender and they wiped away a large portion of their debt and reduce their monthly payments by almost $1000. They said the lender was able to do this because of Federal program for first time home buyers. Have you heard anything about this?
Katie
Hi Katie,
Your friend is one of the luckier borrowers I have heard about. I have researched and cannot find a Federal loss mitigation program that is specific to first-time home buyers or that mandates lowering principle on a loan. There is a plan called Hope Now through HUD as well as several other programs designed to help the struggling homeowner. That being said, there are plenty of loan modifications occurring via the lenders and third parties (For-Profit and Non-Profit). Most do not involve cutting the principle loan amount. In fact, very few will lower the loan amount. Most will lower the interest rate, defer payments, lengthen the term of the loan repayment, etc. The facts are if it makes dollars and sense (pardon the pun), the lender will entertain the modification.
MortgageMaster
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Friday, December 19, 2008
Will Bank Lower My Principal?
Posted by MortgageMaster at 2:14 PM
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