Another way that a mortgage may be modified is through a principal reduction. The principal amount is the amount that was borrowed to purchase the home. This is the amount that needs to be paid back. The principal amount does not include taxes, fees, or interest. It also does not include money that goes into an escrow account. There are times when the principal amount that a homeowner owes far exceeds the amount that the home is reasonably worth. When this occurs, it is called an underwater mortgage.
Sometimes, a mortgage company can reduce the principal amount on a mortgage. This is to make the mortgage more affordable to homeowners. By reducing the total amount owed, the monthly mortgage payments are decreased. The homeowners are able to stay in their home. Mortgage companies are most likely to do this when a mortgage is underwater.
The Mortgage Modification Center
If you believe that a mortgage modification may help your situation, please reach out to the Mortgage Modification Center at (401)467-7998 for your free initial consultation and to discuss your particular situation. Attorney John S. Simonian may be able to help you stay in your home.