The credit crisis and problems associated, such as job losses, are resulting in a higher number of missed payments and defaults, not only on hire purchase agreements and other finance arrangements but also on mortgages and 2nd charges on property. This is resulting in potential repossessions, and although many lenders are in turmoil, there are still avenues open for the consumer in these sort of situations.
A loan modification, or loan workout as it is sometimes known, is popular option, the basis of which is to offer a more affordable option to the client by reducing their monthly payments to an acceptable figure for both parties. The loan modification works in that the terms of the original mortgage loan are modified. This can relate to the interest rate or the length of the term. Usually a full analysis is conducted of the clients financial situation and the property, which is being used as security. On rare occasions a write down of the principal sum has been arranged for a loan workout. However, with the modify loan process although relatively straightforward, there have been some problems with this policy, with many feeling that the lenders are not fulfilling their obligations.
The current situation, is not being helped by the fact that many feel the Loana process is too long winded and deters many from looking at the option. In most cases the handling of the Loan workout process by an attorney, has helped to pave the way to a satisfactory solution