Home Value Changes are Influencing Loan Modifications

July 1, 2010 - PRLog -- Some people owe more than what their homes are worth. When this happens it can be tough to take care of a loan but loan modification services may be able to help people who have this concern.

One of the most popular reasons as to why people have begun to work with more loan modification companies comes from how more people owe more money than what their properties are worth.

The value of a property in the United States has substantially changed over the years. In the United States the median value of a property is about $165,000. This is much less than the median value of $180,000 that was found about a year ago.

Most of the value changes around the country that have prompted people to get into loan modifications are ones that are located in the southern and western parts of the country. In the south the median value of a property in the area has declined in one year from $165,000 to $140,000. The west had dealt with a similar decline in that property values have gone from $215,000 to $200,000.

In some of the wealthiest areas of the country the decline in property values has been even more substantial. For example, in Orange County in California the median home value in March 2010 was about $425,000. This is a significant decline from the $645,000 that was experienced in the middle part of 2007.

In many cases the values of properties can be ones that are lower than that of what a person will owe on a mortgage loan. When this happens the mortgage will be underwater. As a result the mortgage will more than likely not be worth it. At this point a person will try to get into a loan modification program.

Many creditors have been working in recent times with people whose loans have gone underwater. This is so that they can work to get new terms set up to make loans easier to handle. One of the main ways how this is done comes from the use of reducing the principal that is owed so that the value will be able to better reflect the actual value of the property that the mortgage is for.

However not all creditors are willing to work with a loan modification that involves reducing a principal amount. Some creditors will prefer to use other loan modification standards if the losses that could come about by reducing the principal are too high. Reducing it by a few thousand dollars is something that many creditors would be willing to do but cutting it down by tens of thousands of dollars is not something that a creditor is expected to do.


The 1st Foreclosure Prevention Company offers assistance to people who are underwater on their mortgages or are at a risk of going into foreclosure. The company can work with lenders to help with figuring out new terms for one’s loan as a means of making the loan easier to pay off.


Visit us at : http://www.1stforeclosureprevention.com