A borrower had a sale date in late November. This person was in a difficult situation and well behind on payments. Both his 1st and 2nd mortgages were in trouble.

After stopping the sale date, an agreement was made with both his lenders. Here are the case results

• Monthly payment reduced from $4506.57 to $3951. 62

After making this new payment at a savings of $534.95 for six consecutive months, Indy Mac will modify the loan permanently and put delinquent payments at the back of the loan.

Additionally, the borrower entered into an agreement with his 2nd lender to reduce his payments by $105 per month with a 2.25% reduction on his interest rate. $4000 in interest was completely forgiven!

The total savings for this homeowner is $639.95 per month!

You have an impending rate hike on your ARM

You may not be feeling the trouble yet, but you could. If your adjustable rate mortgage is scheduled to reset, it could be at a higher interest rate that makes your home unaffordable with the current mortgage. It’s wise to prepare for this and have options ready if it gets to a point where you can’t afford the loan payment.

You’ve tried to refinance and can’t

A lot of homeowners in this market are finding that lenders aren’t willing to approve a refinance of their current loan. The result is you are stuck with a loan that you either can’t afford or won’t be able to in the near future if an ARM resets to a higher rate. Loan modification is a strong alternative to refinancing that allows you to change the terms of the existing loan without having to refinance

You’re just barely getting by

Perhaps you’re managing to pay the mortgage, but are having to skip other bill payments. Your mortgage could potentially be modified to give you relief and allow you to get back on track.

The best way to approach a loan modification is to get started on the process early. You should have a conversation with a specialist that can advise you what course of action to take. The people that have the easiest time getting help are the ones being proactive.