America has about 19 million homeowners who are underwater - or close to it, i.e., their home is either not worth what they owe on it, or is barely worth what they owe on it. Several solutions can save these homeowners in turmoil.

One of the first things that the government touted to help hurting homeowners in this financial meltdown, was a "loan modification" program that came out in early 2009, called the "Making Homes Affordable" program. According to HUD, "a personal installment loans for poor credit modification is a permanent change in one or more of the mortgagor's guaranteed installment loan, allows the loan to be reinstated, and results in a payment the homeowner can afford."

Sadly, 31% of these "loan mods" have resulted in HIGHER monthly payments! Why higher? Because applicants, in order to get accepted, have to prove that they can make the payments, so they submit such highly positive financial statements that the bank INCREASES their monthly mortgage payments. The fact is, banks are requiring more information for a loan modification than they would for a guaranteed payday loan acceptance application.

A second sad fact is that roughly half of all applicants re-default in less than 4 months! In addition, if a modification is attempted on a Fannie Mae loan, they must wait 12 months to begin a short sale in an effort to try to stop a foreclosure. These costs can add up, especially if using an attorney. The homeowner unfortunately often finds himself/herself in a vice-grip of horrendous debt piling up when attempting a loan modification. There are many horrendous traps to beware of with these programs. For example, you may be asked to sign in advance, what amounts to a "deed-in-lieu" of foreclosure document. This allows the bank to simply take the home if the homeowner defaults - without even having to go through the foreclosure process. After months of waiting - from 2 to 6 months - the loan mod may not even go through. According to a recent article in Realty Times, only about 10% of applicants are even getting this modification. If they want to drag out the process until foreclosure occurs, they certainly have that power. So, Homeowners, beware of the "loan mod." The bank holds all the cards.

Kenny M. Stevens

Real Estate Investing Consultant