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Loan Modification, the Alternative to Foreclosure
Home Finance Mortgage & Debt
By: Thad Collins Email Article
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Foreclosure rates have been on the rise for many years, and the reason for this increase across the nation is our inability to pay higher mortgages. Because of the creative lending policy of mortgage companies, and the popularity of "Sub-Prime" loans, many homeowners received loans that they could barely afford. So the question is; how did our mortgages rise from a level we were barely able to afford, to a mortgage that was out of our budget?

The number one cause is the Adjustable Rate Mortgages (ARMs). The majority of the loans created by lending institutions came in the form of ARMs, so after a period of time, the interest rate adjusted to a higher rate the homeowner couldn’t afford. This is the main reason so many home applicants were approved for loans they could not afford, and the reason so many homes are being foreclosed on. The ARM starts with a low interest rate, and after a specific period of time it is adjusted to a higher rate, so the new adjusted rate increases the monthly mortgage.

Every one of us will endure a hardship in our lives, and there are a variety of hardships we will face in today’s economic environment that will affect us financially. These can include the temporary loss of employment, the death of a spouse, or a medical emergency. And, all of these hardships could affect our income, and thus our ability to maintain our current mortgage payments.

Because of the rise in foreclosures rates, which causes housing prices to decrease, we have developed another dilemma, the" Upside-down Mortgage." This is when the current mortgage is more than the estimated market value of the property, and this situation is beyond our control because it is due to the crisis in the real estate markets. Traditionally most homeowners in a good real estate market that were facing a rate adjustment could refinance the home for a lower fixed rate, based on their record of steadily maintaining their monthly mortgage.

These are the reasons most homeowners are losing their homes to foreclosure, but the best alternative is what is called a "Loan Modification." These modifications are a hot topic all over the Internet, but for a free program that successfully teaches you how to complete a loan modification visit The odd fact about getting a loan modification is that, these same reasons that caused the rise in foreclosures are the reasons you can qualify for a loan modification.

The current administration has enacted legislation to help homeowners keep their home, and stem the increase in foreclosures. The largest of these legislative acts is the presidents "Home Loan Initiative Act," which allow us to modify our current mortgages to a level we can afford. This act, otherwise known as "Obama’s Loan Modification Program," requires that lending institutions and mortgage brokers work with homeowners to apply for, and accept loan modifications instead of letting their homes go into foreclosure.

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Hureon Consulting was started by Thad Collins to help consumers get through financial hardships without having to invest their money in companies that provide these services. As an expert in the field of debt relief he is offering these free DVD’s that guide the consumer through the process of completing a loan modification, restoring their credit, or settling their credit card debt. For more info visit

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