Which Loan Modification Banks Are Reliable and Which Are Not?

At this time when the main news headlines of every day are telling the story of a great bank failure, an average citizen caught in the financial crisis who falls behind in mortgage payments cannot decide which banks to modify. Loans are trustworthy.

After the government announced a loan modification scheme to bail out homeowners, most of the major banks are offering a home loan modification service if you qualify. It is a common misconception among people that banks are unwilling to provide loan modification services. If you look closely, it is a win-win proposition from the government for both the lender and the borrower. When, on the one hand, the borrower keeps the house, the lender not only gets incentives from the government, but also minimizes static assets in the form of foreclosed houses.

Most banks have more or less the same criteria with some exceptions to the lowest allowable mortgage rate and whether or not the borrower should already be in arrears before being eligible.

As a borrower, one would want a bank that should be there with them for the entire loan repayment period and work with them.

There are several banks that offer loan modification services, but the most reliable are:

Wells Fargo, Federal Home Loan Bank: There is a federal government home loan modification scheme in which many banks participate: Fannie mae, Freddie mac, federal home loan banks, Hope Now participants, the Department of the Treasury and the federal housing administration, and Wells Fargo. The banks under this program are backed by the government and are very reliable to avail of the loan modification service.

The eligibility criteria is:

• I should have missed payment for more than three months
• You should live in that property
• Did not file for bankruptcy
• The debt-to-income ratio should be 38%.

JP Morgan Chase and company, Washington Mutual and EMC Mortgage CorpThese three banks offer a combined mortgage loan modification program. They proactively communicate with borrowers to initiate procedures for qualifying borrowers.

• The eligibility criteria is:
• It must be a loan held by JP Morgan Chase.
• The scope of the mortgage loan service is Washington Mutual, Chase and EMC Mortgage corp. borrowers who have adjustable-rate mortgage (ARM) loans before the 31st^{S t} Dec ’07.
• The debt-to-income ratio should be between 31% and 40%.

Citi Bank: This bank is committed to making its home loan modification service available to all Citi group borrowers who are eligible and work honestly with Citi bank.

• The eligibility criteria is:
• Mortgage must be first and loan must be owned by the Citi group
• The borrower must live in that property
• The borrower does not need to be behind on payments, but needs help to avoid late payments.
• One for whom the calculation of the calculation of the monthly gross income payment does not cross 38%.

Bank of America (national finance): Under this mortgage loan modification program, Bank of America is committed to modifying distressed mortgages of up to $ 8.4 billion in interest rate and reducing the principal rate for approximately 400,000 customers nationwide.

• The eligibility criteria is:
• The Scope of Home Loan Service is for Bank of America borrowers who have adjustable rate mortgage (ARM) loans dated prior to 31^{S t} Dec ’07.
• The borrower must be in default for a period of 60 days or more.
• The debt-to-income ratio must not be less than 34%.

Federal Bank Indy Mac: The Indy Mac Federal Bank is committed to helping its borrowers with sustainable and affordable mortgage payments.

• The eligibility criteria:
• The mortgage must be first and the loan must be owned by the federal bank Indy Mac.
• You should be an Indy Mac Federal customer.
• Property must be owner-occupied.
• The debt-to-income ratio must be greater than 38%.
• The borrower does not need to be behind on payments, but needs help to avoid late payments.