Got the adjustable ARM blues?

Maybe it’s more like the home foreclosure nightmare. Your payments may have escalated considerably when your ARM adjusted much higher than you ever expected. Then you were hit with a sliding housing market, putting your home’s value at a lower price than what you paid.

There is a way to recast your situation, to get a bank to agree to lowering your interest rate and, consequently, your monthly payments. You can present your case to your lender, show them that you can make payments, just not as big as they’ve become. Due to government and media pressure, most banks are open to doing this.

Banks are open to it for another reason as well: they don’t want to own your house. It’s not their best business. They will have to sell it, and there’s a much lower chance of that happening today than in decades. And, a foreclosure costs them money and staff time.

Problem is, most regular people don’t have the knowledge on how to negotiate a mortgage refinancing in this economic climate. Terms such as “loss mitigation,” “loan modification” and the like are not in their vocabulary. This is why loan modification specialists have risen up as a small industry. They serve as intermediaries for borrowers, using professional skills in law, finance, real estate and negotiations to find homeowner’s best options in foreclosure and pre-foreclosure.

Words to the wise borrower: beware of loan modification firms that don’t provide strong assurance or even a money back guaranty before accepting a case and the fees they charge (about $300 per case). They should be able to assess with very good accuracy which case will be successful in advance.