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Mortgage modification timeline can mean higher payments soon

On Behalf of | May 30, 2014 | Firm News, Loan Modification vs. Bankruptcy

When the recession hit, many homeowners across the country turned to loan modification programs as a means of lowering their mortgage payments and holding on to their homes. Government programs helped many Florida homeowners obtain a mortgage modification they could handle. However, for those who were approved for and now make lower payments thanks to a mortgage modification, they may see their rates go up this year.

Those who obtained a modification through the Home Affordable Modification Program in 2009 may need to plan for a rise in payments, as the time period for lower payments is up. The agreement, although called a permanent modification, is for a five-year period. The good news is that the lenders are required to warn homeowners of the rate increase in advance.

There are some problems foreseen with the rate increase for some homeowners. One problem experts point out is the fact that the economy hasn’t fully recovered, meaning homeowners may not be able to afford the increase and could subsequently end up in the same situation again. One helpful option for those who might not be able to afford the increase is to have their home re-appraised to see if an increase in value means that they may be able to sell, unlike when the crash hit and homes were underwater.

An increase in mortgage payments — thanks to a virtual expiration of the mortgage modification terms — might be scary for some Florida homeowners. However, filing for bankruptcy is an option that could help homeowners who may not have qualified before. With the proper pursuit of bankruptcy, a homeowner may be able to keep his or her home, or he or she might be able to get a fresh financial start that allows for the discharging of troubling debt.

Source:, “Got HAMP? Mortgage Payments Will Go Up”, Polyana Da Costa, May 27, 2014

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