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What is a mortgage loan modification?

MMI Copywriter

By Kim McGrigg, MMI Community Manager

There has been a lot of attention placed on home modification loans as a way to help prevent home foreclosures. A home modification loan is an agreement that actually changes the term of your existing loan. The Making Home Affordable program uses government subsidies and incentives to reduce principals and lower interest rates on conforming loans.

While loan modification is the right solution for some struggling homeowners, it is not the solution for every struggling homeowner.  Following are basic criteria to qualify for the Making Home Affordable loan modification program:

  • The property is owner-occupied
  • The unpaid principal balance that is equal to or less than a certain amount (based on number of units up to 4)
  • The loan originated on or before January 1, 2009
  • The mortgage payment greater than 31% of gross income
  • There is financial hardship that can be documented

If you are having trouble making your mortgage payments and are considering loan modification, there are some things you should know.

  1. You don’t have to go it alone. A HUD-certified housing counselor can help you assess the situation, create a plan of action, and outline next steps.
  2. It pays to be proactive. The most important thing to do is to take action. Seeking help sooner rather than later can increase the number of options you have available.
  3. There may be other options. Loan modification is only one of the many possible solutions to foreclosure. 
  4. Be patient, but persistent.  It takes time (and paperwork) to make changes.  Be sure to keep copies of all related documents for your files and be aware of any deadlines.
  5. You must beware of scams. Never agree to transfer your deed and do not make payments to anyone but your lender without their approval. There should not be a fee associated with housing counseling.

Finally, don't assume that there isn't help for your situation; there are new programs being launched all the time. For example, there is a new program designed to help people who unemployed. Part of a trained housing counselor’s job is to have the most up-to-date information available so that he or she can help identify your options.

For more information or to schedule an appointment with a HUD-certified housing counselor, visit our section of the website dedicated to providing foreclosure help. You can prepare for your appointment by checking to see if you are eligible for the Making Home Affordable program. To do this, you can use the tools found at

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Ways to save on the cost of your pet


Sixty-two percent of households, roughly 71.4 million homes, own a pet according to the 2009/2010 National APPA Pet Owners Survey. While the majority of U.S. households get to experience the joys of pet ownership, they must also work the expense of owning a pet into their budgets.

If you already own a pet, or are considering adopting a pet into your family, you can benefit from the following tips to cut back on the expense.

Research the type of pet you want. When selecting the right pet for your lifestyle and your budget, research is important. Certain types and breeds of pets are pricier than others. Take into consideration the cost of food, grooming costs, and whether the particular breed has any potential health concerns that may cost you at the veterinarian’s office.

Adopt from a shelter. Adopting an animal from a shelter can be rewarding for you and your wallet. Often, shelter animals have a much smaller price tag than an animal from a breeder. Shelters will often spay or neuter the animal, as well as give any needed vaccines for a fraction of the price a veterinarian would charge.

Groom at home. If your pet requires frequent grooming, consider purchasing some starter supplies and taking on the challenge. Grooming your pet helps you and your animal bond, plus, you forgo money spent at the groomer. One golden retriever owner calculated a savings of $623 per year by grooming at home rather than taking his pup to a professional.

Get the right kind of food. Just like with people food, striking the right balance between nutrition and price can be tricky. The cheapest pet food may contain unhealthy fillers, resulting in more trips to the vet over the pet’s lifetime. The highest quality pet food, however, is also a poor choice if you cannot afford it. The perfect food for your pet is one that balances your pet’s health and your financial well-being.

Keep your pet safe. While veterinary checkups are always recommended, you can avoid unnecessary trips to the vet by making sure your pet is in a safe environment. Keep cats indoors and dogs in fenced-in areas or leashed to avoid injury from cars and other animals.

Pet ownership does not have to be a huge strain on your finances. Implementing a few money-savvy strategies into your budget can help pet ownership be a rewarding experience.

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About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24 hours a day, 7 days a week by telephone and Internet. Services are available in English or Spanish. To learn more, call
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