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The Current Results of Homeowner Modifications

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by: No more debt !
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Date: Mon, 19 Jul 2010 Time: 8:32 PM

The buzzword "modification" is gaining more and more recognition as more homeowners qualify and are eligible for a this program issued either by the lender privately or through the Federal Government. More and more homeowners have been receiving modifications since the conception in March of 2009. Recently April's statistics show a little under 300,000 borrowers have received a mortgage reduction to their payments out of around 1.2 Million borrowers. This results to about 25% of the individuals who have received a trial modification have received a permanent modification to their payment. 

For those who are unfamiliar with a modification and would like to know more a modification is simple modifying your existing loan by negotiating with your lender to reduce your monthly mortgage payment. Each lending institution has specific criteria they all look for to determine eligibility when they received applications. The first is whether or not the homeowner is struggling to make payments, due to no fault of their own, in accordance with the originally signed documents. The second item lenders will review is whether or not your current mortgage payment is greater than 31% of your gross income. If your mortgage payment is greater than 31% then you move through another obstacle in receiving a trial period before receiving a modification. Other aspects lenders look at are: is this your primary residence, was your home originated before January 1, 2009, and if your home is less than $729,750.  

There is plenty of information via online pertaining to mortgage modifications, or the newly initiated HAMP program administered by Obama. Here are some more results pertaining to permanent modifications since January. 

  1. In the month of January over 1 Million homeowners applied and received a trial modification and a little over 100,000 borrowers received a permanent change and lender's modified their loans. The percentage of the modifications landed about 11.3%. 

  2. In the month of February over 1.1 Million homeowners who applied for a modified loan received a trial modification. From the 1.1 Million borrowers a about one hundred and seventy thousand loans were modified. February permanent modifications increased to by 60,000 with an increase of about 4%. 

  3. March also has shown significant results as a little under 1.2 Million borrowers qualified and esteemed eligible by their lenders for a trial period. From this number of eligible homeowners the lenders then granted 230 thousand borrowers a permanent modified loan reducing their payments. In light of these we have seen the industry continually to increase by the number of trial periods offered and permanent changes extended making this a total of 19% or so. 

  4. The month of April continued to increase as previously mentioned with over 1.2 Million qualifying for a trial period, with a little under 300,000 homeowners extended a permanent reductions to their monthly mortgage statement. The end result the percentage increase another 6% of permanent mods extended from March's 19%. The accumulative increase over the past four months of 13%. 

Over the past four months another amazing result with permanent modification having a median of a little over $500 in savings per month. How many homeowners, including myself, wouldn't mind a potential $500 dollars off their loan if they qualify and are determined eligible for a permanent modification through their Mortgage Servicer?

Although the numbers and percentages have increased by 13% in the past four months as more homeowners are determined eligible, one still must consider the 75% who have not received a modification either due to not making payment on-time during the modification or unable to provided verifiable income (stated income, more risk for the lender).

The question then is how does a borrower increase their chances of being accepted? First, they can do their own research, understand what lender's are looking for, and contact the lender themselves. Or, they can look at working with experts and professionals in the field of a financial matters, particularly a licensed Mortgage originator. An expert is defined as one who has the necessary specific skills, education, and understanding of a specific field. A professional is defined as one who is characterized by adhering to the specific ethics within their field of study or vocation. Both are necessary when determining a to work with a company who provides the service of negotiating a modification with your lender.

About the Author

Andrew Exon is a licensed mortgage originator in the state of Utah.  He works for a professional brokerage who assists responsible but struggling homeowners by reducing their monthly mortgage payments via a modification on their home loan.  We have been able to substantially increase the potential for our customers to successfully consummate a modification with their lender.

For more information, or to find out if you qualify for a modification with your lender.  Please contact Andrew at 801-854-9838, or visit one of our two websites and

We look forward to assisting homeowners in successfully helping them to reduce monthly payments and keeping them in their homes.

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