Mortgage Modifications

If you are considering personal bankruptcy in Kansas City and want to save your home you may want to consider loan modification before filing for Chapter 7 or Chapter 13 bankruptcy.  In response to the housing crisis, some banks and private lenders are voluntarily reducing mortgage principals to help homeowners who are at risk of losing their home.  This move has recently received support from the International Monetary Fund (IMF).  The IMF's managing director recently called on Fannie Mae and Freddie Mac, two holdouts who have yet to endorse principal reductions, to join other major lenders in curbing the housing crisis by reducing mortgage principals to more accurately align them with fair market value, resulting in fewer underwater mortgages.  The Acting Head of the Federal Housing Finance Agency has been under recently scrutiny by Congress, the administration and regulatory agencies for failing to give the go-ahead for mortgage principal reductions.

Reducing principal on existing mortgages will prevent homeowners from going into foreclosure by providing them with a new, modified monthly payment that homeowners can afford.  Lenders would take a loss but many of them view it as a less-costly alternative to foreclosure or a short sale.  The government's Home Affordable Modification Program (HAMP) also offers lenders an incentive of 18 to 63 cents for every dollar in mortgage reduction.  HAMP revisions also now offer that incentive to Fannie Mae and Freddie Mac although neither has indicated a willingness to allow reductions in mortgage principals.

To further discuss your options, including loan modification and/or bankruptcy, during a free consultation please contact me, Kansas City bankruptcy attorney Cary Smalley, at The Smalley Law Firm at (913) 601-3549 or at http://www.thesmalleylawfirm.com