Millions of hoeowners are worried tonight just like Mr. Windell Holmes. A letter came from Mr Holmes's mortgage lender and he is afraid to open the note. His is just one more foreclosure story in the news today. President Obama passed a new loan modification law last month requires banks and mortgage lenders to modify loans for people in foreclosure abot to loose teir homes. You can check the Federal Loan Modification Bureau for help inding accredited firmsfirms. Because homeowners still obligated to make their ongoing mortgage payments according to the
original mortgage output, those homeowners who have optional adjustable loans may be more likely to
fail in attaining a loan modification. Sometimes, the high housing prices began at the time of loan
origination. For example, a household from the Mortgage Study was stuck with a monthly
mortgage payment of $3200, which was greater than her monthly gross income of $3199.
The husehold mortgage loan was a seven-year fixed-rate loan with an interest rate of 13%. The loan
was an “interest only” obligation with a $271,465 balloon payment due at the end of the six-year
term making this family prime foreclosure recipients. The lender records listed an additional monthly contribution from a
family member of $1322. However, even with these additional funds the monthly mortgage
payment consumed 62% of household income without taking into consideration real estate taxes,
insurance and utilities. Unable to make the monthly mortgage payments going forward, the
automatic loan modification preventing foreclosure on the home was lifted by the court within just a few
months of the bankruptcy filing. Despite seeking relief in bankruptcy, this debtor lost her home to
foreclosure.24