In recent years, many Orlando residents have pursued mortgage modifications in order to avoid foreclosure. Mortgages can be modified in a variety of ways. Interest rates can sometimes be lowered or changed from adjustable to fixed. It is possible in some cases to lengthen the repayment term in order to reduce the amount due each month. In other cases, homeowners are even able to negotiate a principal reduction.
While banks are not required to provide homeowners with mortgage modifications, a number of Florida residents have been able to obtain them.
Many lending institutions here in Orlando have their own loan modification programs and processes, while others have worked with the government to offer various forms of modification assistance. About 800,000 homeowners across the country have obtained mortgage modifications since 2009 under the federal Home Affordable Modification Program. Most HAMP modifications have resulted in prolonged interest rate deductions.
Under HAMP, many homeowners were able to have their interest rates significantly lowered for a period of five years. After five years, the interest rates can rise as much as 1 percentage point annually, maxing out at the rate that was in place for a 30-year fixed rate loan when the modification was implemented.
Those who modified their mortgages under HAMP in 2009 will see their interest rates begin to increase this year. Hopefully, homeowners will be able to afford the increases.
Florida residents who are wondering about what options may be available to prevent foreclosure may benefit from talking to an experienced mortgage modifications attorney.
Source: Montgomery Advertiser, “Modified rates on mortgages to jump,” Julie Schmit, Jan. 29, 2014