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Are Mortgage Modification Interest Rates Dropping?

For homeowners struggling with mortgage payments, one of the first options that comes to mind tends to be mortgage modification. Of course, in order to be truly beneficial, the mortgage modification must result in a reasonably lowered interest rate.

Now, Fannie May and Freddie Mac have announced that they are dropping their standard mortgage modification benchmark rates to the lowest of the year. Could this prove beneficial to struggling homeowners?

Does This Mean Everyone Can Get A Lower Interest Rate?

According to an article from Housingwire, both government-sponsored enterprises have lowered their benchmark rates to 3.875%. Although this is a low for 2017, it does not beat the most recent low of 3.5% from August 2016.

Not every homeowner will be able to get the lowest interest rate, of course. First of all, the homeowner must have a Fannie May or Freddie Mac mortgage. Furthermore, homeowners must be working with loan servicers who use the standard modification interest rate. Even if a homeowner does, there will be a process and not all requests for loan modifications will be granted by lenders.

Whoever the loan provider may be, homeowners should be aware that there are predatory businesses making promises of mortgage modification that they simply cannot fulfill. In recent years, many homeowners have been the victims of fraud and mortgage modification scams that have left them in even worse trouble than they were in before. Homeowners must be on guard and may want to work directly with an attorney.

Will Mortgage Modification Prevent Foreclosure?

When homeowners get underwater with their mortgages to the extent that foreclosure becomes a very real possibility, they should use caution in hoping that mortgage modification will be the way out.

Foreclosures can move extremely fast in Texas, while mortgage modification can be a drawn-out process. The mortgage modification would have to be handled with speed and precision by a reputable business with a record of positive outcomes. Additionally, homeowners should be aware that there may also be other foreclosure defense options that can help them stay in their homes. The key is to act quickly.

 

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