The Andres Lopez Law Firm

Government-backed loan modification programs

There are occasions in which a Coral Springs, Florida, family can legally fight off the foreclosure of their home. Many banks and other lending institutions are not always careful about following this state's foreclosure laws and related legal provisions. In certain cases, their lack of attention to detail can stop or at least slow down a foreclosure.

However, in other cases, an effective foreclosure defense is going to involve some give and take between the borrower and the bank. One example of a give and take is when a borrower asks for a loan modification that makes her housing payments more affordable.

Banks offer certain private loan modifications for which borrowers will have to qualify. Traditional refinancing is also an option for certain borrowers. However, Florida residents should also be aware of a couple of government initiatives that can help them should they run in to trouble with making their house payments.

One program, the Home Affordable Refinance Program, or HARP, allows homeowners to seek refinancing should they find themselves upside down in their mortgages. A homeowner is upside down, or underwater, in a mortgage when his house is worth less than the balance of the loan or loans he owes on it. While many banks would shy away from refinancing in such circumstances, HARP allows eligible borrowers to pursue more affordable loan terms despite the fact they have no equity in their homes.

Another program, which recently replaced the Home Affordable Modification Program, or HAMP, is Freddie Mac's Flex Modification program. Another federal lending corporation, Fannie Mae, also offers a similar program. The goal of the Flex Modification program is to allow eligible borrowers to seek more favorable loan terms should their housing payment begin to eat up too much of their overall monthly income.

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