Do Homeowners Need to Refinance to Stop Foreclosures Or a Loan Modification?
The Director of the Center for Responsible Lending, Keith Ernst said during Congressional testimony that the 1.5 million homes already foreclosed “are just the tip of the iceberg.” Thirteen million foreclosures are expected over a five years period from the end of 2008 to 2014. At the moment one in ten homes are facing foreclosure but by the end of the year it will be one in eight homes. The current crisis is obviously going to get worse, but for the individual homeowner facing foreclosure it’s small comfort that so many others are suffering too. What can be done? Some homeowners wonder if they need to refinance to stop foreclosure? Others think they need a loan modification? What are the differences? Many people confuse loan refinancing and loan modification. Generally, to refinance an owner wants better terms and wants to take some equity out of the home. The owner’s credit must be good and there should be a minimum of 80% equity to get a good rate. A homeowner may shop for different
