I’ve spoken to many Florida homeowners in latest months that that have fallen behind on their mortgage. I explain to them that they need to take activity and seek loan modification assistance if they want to avoid foreclosure on their home. That is usually followed by the commonly asked question “what is a loan modification?” Some have asked if it’s better to just brief sale their home or just file for bankruptcy.
The South Florida areas of Miami, Ft Lauderdale, and West Palm Beach have been among the hardest hit areas in the state of Florida since the foreclosure crisis hit. If you are one of those homeowners fighting to make finishes meet then I will tell you the same thing i’ve told Florida homeonwers i’ve spoken to in latest months…seek a Florida Loan Modification company and find out what your options are to stay in your home.
A latest report on CNN states that a brief sale can cause inbetween a 120 to 130 point drop in your credit score. If you are thinking about letting the banks foreclosure on your house then that would mean a 140 to 150 point drop in your credit score. What if you file for bankruptcy? That is the absolute last thing you would want to do if you want to maintain your credit score. A bankruptcy can cause your credit score to go down from 355 to 365 points.
However, a loan modification will have a minimal effect on your credit score…almost meaningless. Any reputable Florida loan modification company will tell you that.
Another question I am asked is, “why would lenders want to help me?” The response is elementary. Lenders do not want to pay the costs necessary for a foreclosure. The foreclosure process can cost the banks $50,000-$60,000. It would benefit them more if they kept you in your home. Of course, you would need to display them that you can keep up with monthly payments once the terms of your mortgage have been restructured.
Keep in mind that while a loan mod can help you reduce your interest rates, reduce your monthly payments, and modify the terms of your loan, the process can take as long as Three or Four months. Be patient and in the end, with a successful loan modification, everything can work out for you.