Does it feel like you just woke up one morning, looked around, and asked yourself “how did we get into a situation where we would need a housing rescue bill? The problem is long and multi-faceted. As with most problems in the financial realm it begins with the quality of the underwriting of the loans. When underwriting standards are relaxed it often results in too much credit being extended and that allows buyers to purchase beyond their means. The inexpensive (at least initially) and easily available credit heightened the demand for homes. As the demand increased, prices for homes increased, and the spiral continued with upward trends in housing prices. As investors jumped into the market to take advantage of the rising prices they were looking for payment options that would compliment their “flip” mentality - they were not particularly interested in the long term affects of mortgage financing structures. The demand for the lowest possible monthly payment was the result of short term thinking that was an early contributing factor to the need for the American housing rescue.

The low monthly payment provided by ARM,s negative amortizations and other structures allowed borrowers to purchase homes that they would otherwise be able to afford. A slowdown in the real estate market made it impossible for many to sell their homes and as a result many are in pre foreclosure.

This foreclosure problem has existed for many years however, the current situation is unique due to the number of borrowers that are relying on mortgage loan modifications. The number of properties in this situation has catastrophic implications on the financial markets. Many people caught in this situation are not quick flip investors or homeowners stretching beyond their means. Many are just ordinary people that were looking for a better opportunity for their family and now they face foreclosure and need to stop foreclosure.

The solution to the problem is not to let the loans all go bad - the financial institutions could not survive the blow. Many borrowers are relying on mortgage loan modifications and government help to avoid foreclosure. So, where do we go from here?

Most would agree that keeping people in their homes is better for the economy than homes foreclosed by banks that are vacant. This would result in even further decline in housing values and have a profound impact on the economy. The Obama stimulus package has earmarked funds dedicated to this segment of the economy. More to come on ways to save your home from foreclosure. continued…

A professional approach often means hiring professionals to do the work for you.

At a time when a homeowner is in pre-foreclosure or just worried that foreclosure will hit them in a few months, it may seem impossible to hire someone to help you out of this situation. But loan modification firms are structured to help people in the greatest need, those who are struggling to stop foreclosure on their homes.

These individuals need a rescue. But for foreclosure prevention to take place, the homeowner needs to have some income and still be able to prove their current mortgage terms are untenable. Loan modification firms can examine the individuals’ cases and figure out how to present it to the lender in a convincing way.

There’s no deception in this process. It’s purely a matter of knowing what circumstances trigger a bank’s interest. Most banks lose in foreclosures, so they are open to hearing the case. It just helps with the negotiator knows their language, has all the right documentation ready, and communicates without the emotions that homeowners tend to have around the wrenching dilemma of foreclosure.

Millions of distressed homeowners fear that a letter from their bank stating they are in pre-foreclosure is the beginning of the end. They sometimes begin to make arrangements to move 60 days before the foreclosure is to take place.

Instead, that letter should be a signal to the homeowner to search for options. Of course, the homeowners knew they had difficulties for months and even years preceding this point. Illness, loss of income, divorce and other circumstances generally create an accumulation of debt that builds gradually. But if the homeowner can show that they have a stream of income of some sort, they should be able to work things out with the bank. Their option includes approaching the bank to see if they can recast the mortgage terms.

Of course, few people are capable of negotiating with banks on their own. This is why many turn to loan modification professionals – lawyers and financial people – to do those negotiations for them. As experienced experts who have knowledge on what a foreclosure costs a bank, the loan modification team can recast the terms of the mortgage that enable the homeowner to retain ownership, stay living in the house and with reduced monthly payments through a lower, locked-in interest rate.

Loan modifications work on a pre-approval basis: they examine a case before taking it on, and if unsuccessful, they return the fees to the homeowner in a money-back guaranty.

Foreclosure is the dirty word of 2009. With millions of Americans facing hardship from loss of employment, or an ARM that took monthly payments beyond reach of their income, or both, foreclosure and pre-foreclosure are common concerns on virtually every residential street in America.

What’s become plainly evident in this era is that the legal and financial language of mortgages and home ownership overall is beyond the comprehension of a majority of hard-working people. This includes those with college educations, even graduate level degrees. And it’s the reason why bringing in a third party to negotiate with a lender makes a boatload of sense.

Loan modification firms are specialists in real estate and finance law. They know how banks work, and what will convince a lender to change the terms of the loan. They are able to show the lender that a foreclosure is not in the bank’s best interest in many situations. When they do, they succeed in recasting the terms of the mortgage, effectively enabling homeowners to stay in their homes at lower monthly and life-of-the-loan costs.

Reputable loan modification specialists generally charge the equivalent of one monthly mortgage payment to work on a homeowner’s behalf. Because they can look at the objective details of a case before going to work, they should be able to project with high certainty whether or not they will be successful. And the most respected firms offer a 100% guaranty cash-back if they are not successful.

Banks are not monoliths in home foreclosure situations. They really do want to work out a way for distressed borrowers to avoid foreclosure, even if they are in pre-foreclosure. But on average, loan officers are burdened with 800 case loads each and they don’t have a lot of time to deal with the emotions borrowers are experiencing.

The smartest borrowers take a dispassionate approach by hiring a loan modification firm. For of a fee of about $300, they are removing their own non-familiarity with bank terminology and their emotions from the equation. Instead, they are being about as savvy as anyone in this economy can be, hiring experts in real estate and lending laws, finance and negotiations to go to bat for them.

The results: A homeowner with a loan modification firm working on her or his behalf has a 93 percent chance of achieving better terms. The bank wins too, as does the neighborhood (many members of which are customers of the same bank) – fewer foreclosures overall keep up home values for everyone. None of these recast efforts depend on government intervention – the borrower can move immediately at fixing their situation.

An unreported phenomenon in the home foreclosure crisis is how millions of mortgaged properties are being saved from foreclosure when the homeowner works with a loan modification firm to recast the loan.

By calling in specialists in law and financing, the homeowner is making a deft move to take advantage of banks’ own vulnerabilities. Banks suffer when they foreclose on a property. They don’t profit by having to manage the properties, trying to sell them in a down market, usually at a loss. And they lose a customer they expected for 20 or 30 years.

Loan modification firms that are reputable offer homeowners in pre foreclosure or foreclosure a reasonable package: fees of around $300 per loan, no added points or other hidden fees, and a money back guaranty should they not succeed at getting a better deal for the borrower. In fact, a good loan modification company is so versed in what they will negotiate with lenders that they will not take a case or a fee without a high degree of certainty.

Note these arrangement are not waiting on government action. The homeowner and their loan modification firm are operating privately, with no government strings attached.

People whose homes are in pre-foreclosure may feel they have already lost. The sense is it’s only a matter of time before they move somewhere to rent, a world they thought they left when they optimistically bought their house or condo in recent years.

Anyone thinking that way needs to stop dead in their tracks and say, “no!” In fact, without a government program, without winning the lottery, a homeowner in trouble can recast the loan terms that are problematic to a manageable level. The solution is found in loan modification firms – staffed by by bank-savvy lawyers, financing specialists and real estate professionals who know the vulnerabilities that banks are facing. Facts are, the banks lose in a foreclosure too. Loan modification firms have the lingo and know-how for getting the bank to reconsider ways to keep you, their customer.

Wouldn’t it be great to recast your loan? Whether you are in pre foreclosure or in danger of getting there soon, wouldn’t you rather find out about the possibility of refinancing? There is actually no risk — look for a reputable home loan modification firm that charges about $300 per loan (no points — that’s the full amount you should pay), and if they are unsuccessful, they should offer a money back guaranty.

While the Obama administration’s proposals to save homeowners from foreclosure, to recast the terms of their ARM or other types of troubled loans, will help millions, millions more homeowners will not qualify or may not get help in time to stop their own foreclosure.

Anyone in pre-foreclosure or in danger of going there soon would be smart to find $300 to pay a loan modification firm to help renegotiate terms of their mortgage. A loan modification firm has its own lawyers, banking specialists and real estate professionals who understand what will get bank’s attention. They know what it costs a bank to execute a foreclosure – in fact, no lender benefits when that happens. They get stuck with properties that cost them money and will likely lose as they try to sell in this down market.

A loan modification firm is a means for homeowners to take action, even if they are intimidated by lenders and the language of loans and foreclosure. The homeowner is freed from the burden and emotion of negotiation, working with professionals looking out for the borrowers’ best interests. In the end, everyone wins.

Note: Be sure to hire a loan modification firm that will only take a case with a high degree of certainty that they will succeed in achieving better terms, and in the unlikely case they do not, that they will refund your fee.

Struggling against a bigger mortgage or because of a hardship (such as illness or loss of income) is the story of newspaper and television headlines every night.

But the media are missing an important, more hopeful part of the story. It’s how many homeowners are finding better mortgage terms with their banks, and it’s not just people with great credit and lots of money who take advantage of historically low prime interest rates.

In fact, borrowers in pre-foreclosure are getting a mortgage rate recast sufficient to retain ownership of their homes for the long term. They either are savvy at presenting their case to their lenders – compiling proper paperwork, negotiating effectively with bankers in the language they understand – or, they hire specialists in this area. The specialists are loan modification firms, staffed by lawyers, financing and real estate experts who are familiar with all banks’ positions and needs.

At the basis of this is how it’s not in the banks’ best interest to foreclose on properties. It’s a costly process for them, particularly in how they get stuck with property that is expensive to maintain and unlikely to sell in the near term.

Borrowers should expect to pay about $300, perhaps more, for the services of loan modification firms. Those firms should also offer a high degree of certainty they they will succeed, as they generally understand what it takes to do so. And if they take a case and fail, more reputable firms will offer a money-back guaranty.

There are a few good things happening for homeowners whose mortgage payments are currently beyond their ability to pay. The interesting thing is some have nothing to do with federal stimulus plans or the White House’s own plan to stave off foreclosures.

It helps to understand how banks don’t want to foreclose on properties. Really, they don’t. They don’t want to be property managers or real estate marketers. Especially in this very depressed market. They would much, much rather recast a loan, to keep a property producing payments for the life of the mortgage.

Next, understand why banks are hard to talk to. First, their loan officers handle hundreds of cases. With the economy being what it is, each loan officer is getting dozens of new calls every day from borrowers, many of whom are emotionally distressed and lacking both proper documentation and an ability to speak the language of banking and loans. It’s no wonder why few homeowners succeed at this on their own.

And, that’s where a new industry has arisen in this era to serve a very useful, valuable function. Loan modification specialists are intervening on behalf of distressed homeowners, going to bat for them with the knowledge they bring: legal, accounting and banking professionals generally make up the staff at loan modification firms.

The borrower needs to beware, however. Fees for loan modification should be reasonable. Expect to pay at least $300 (to negotiate terms that would reduce your costs by at least that much in one to three months), sometimes as much as $500. And the loan modification firm should offer a guaranty on their chances for success – the process is clear cut for those in the know, so they should be able to predict with a high degree of accuracy whether or not your case qualifies.

Borrowers who are already in pre-foreclosure can still use this service with success. The most beneficial act is to take the first step in finding out if you qualify.