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"The median monthly payment reduction for borrowers enrolled in
the (HAMP) program is $522" - DSnews.com
What Happens If I Don't Get A Loan Modification?
It is no secret that for many people currently, a modification is simply not an option. Regardless of if they qualify or not these people are simply receiving modifications from their lender or servicer. If you are a borrower who is current then your option at that point is to continue along as before, or go late to see if that changes anything, a very risky move looked down upon by the banks and rightfully so. If you are behind on the mortgage and they continue to deny you, you have a range of options instead of a loan modification. For example, you may negotiate a short sale. A short sale is when the lender allows you to sell your home and discounts the amount you owe so that you can walk away with less or no debt. It is a way to get out from under an upside down house while not harming your credit as badly as a foreclosure. Another option is cash for keys. This is where the lender or servicer pays you to make it easy on them and move out easily and quickly. This can be a good option for those who have no option but to lose the house. At least you get some money to rebound on to your feet. Another option is a repayment plan. This is where you decide you really do not want to lose the house and so you pull money out of 401k, retirement, or savings and you put it towards your mortgage to stay in the house. The lender typically gives you no break here other than letting you become current and the amount you were behind typically gets wrapped into the loan.
Remember, getting a loan modification is no simple task. Of course like anything else, some are easier than others. What matters most is that you understand that many people are in your same position right now and even if you do not get a modification there are other options available that may be able to help with this difficult time.
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