Mortgage Refinancing

The tough restrictions of Obama's Loan Modification Program are putting a strain on many homeowners as they apply for mortgage refinancing or modification. In spite of their best efforts to save their homes from foreclosure, many are losing them anyway.

In order to encourage banks and financial institutions to help these homeowners save their homes, the government offered incentives to them. But many lenders chose not to participate in the program and were not as willing to extend a helping hand to these troubled homeowners because there was just too much risk involved in extending credit to those who had gotten in over their heads in the past.

Congress stepped in and announced that it would be making changes to the Loan Modification Program, however, because the Obama Administration is directing its reform efforts to the health care system, these proposed changes will not come as quickly as hoped.

While the government drags its feet on overhauling the Mortgage Loan Modification Plan, nervous homeowners who are struggling to keep their heads above water are wondering what they can do.

Homeowners need to realize that there are other options available to them that will allow them to put off the foreclosure process. How long that process can be delayed is determined by several factors, including which method they choose and their current status with their particular lending institution.

The most commonly-used methods you can use to delay the foreclosure process are:

* Writing a Hardship letter to your lender and explaining in detail why you are having trouble making your mortgage payments. It is important to tell them what changes have occurred in your situation, such as loss of employment, death of a spouse, or some other factor that has affected your ability to meet your financial obligations.

* Requesting a formal court hearing regarding your home foreclosure and then taking steps to delay the hearing as much as possible.

* Researching every detail of your original mortgage contract to look for loopholes or errors. Any errors you find can be the basis for renegotiation with your lender because of their mistakes. Statistics show that the number of loan documents containing errors is very high.

If approached in the correct way, these methods can be very effective in delaying a foreclosure and can provide more time to find a permanent solution to your mortgage loan problem. During this delay process, you will not have to worry about paying your mortgage, so that will take a little of the financial pressure off.

It is important to remember that this is a legal process, so you must educate yourself on contract law in order to properly deal with these matters by yourself. A lawyer can be helpful in these situations, but may not be necessary. You can actually save a lot of money by taking these steps on your own, as these are the very methods that attorneys would use to delay your foreclosure as well.