With the current financial instability in the economy, many mortgage lenders are offering to modify a mortgage loan for those who can qualify.
The credit crisis and problems associated, such as job losses, are resulting in a higher number of missed payments and defaults, not only on hire purchase agreements and other finance arrangements but also on mortgages and 2nd charges on property. This is resulting in potential repossessions, and although many lenders are in turmoil, there are still avenues open for the consumer in these sort of situations.
A loan modification, or loan workout as it is sometimes known, is popular option, the basis of which is to offer a more affordable option to the client by reducing their monthly payments to an acceptable figure for both parties. The loan modification works in that the terms of the original mortgage loan are modified. This can relate to the interest rate or the length of the term. Usually a full analysis is conducted of the clients financial situation and the property, which is being used as security. On rare occasions a write down of the principal sum has been arranged for a loan workout.
With the plight of many households in the balance, and the government itself, suggesting leniency, the mortgage lenders have a moral duty to help the consumer, who may be struggling to meet their financial commitments, on many occasions through no fault of their own, with any solution to help alleviate the current problems. In fact many people are outraged at the double standards being shown by some lenders in that their, so called ineffective lending policies during the so called "boom times" have led to these problems and the suffering of many people, and now the tables are turned and having been rescued by billions of taxpayers money, they are refusing to help the very people that need it.
