Some Mortgages Extended To 40 Years Under Modification Terms

Mortgage modification applications have piled up recently as more homeowners explore all their available options before losing their home to foreclosure.

As the federal government continues to put pressure on banks and lending institutions to work with consumers and provide more modified loans, many are finding that the only way to reduce a homeowner's monthly payment to a reasonable amount is to extend the length of their mortgage to a 40-year term.

According to the Orlando Sentinel, nearly half of the 390,000 permanently modified mortgages that have been processed under the Making Home Affordable Program have also seen their repayment period jump from 30 years to 40 years. But some consumers and professionals are encouraging homeowners to avoid an extended mortgage.

"If you're 60 and you're in a 40-year note, you're really just renting it from the bank, and you're paying more than you would from someone else you could be renting from. This is what the car dealers sell - they sell payments - that's what the mortgage industry has gotten into," attorney Matt Englett told the Sentinel.

Consumers seeking debt relief through federal and state programs should ensure they understand the full terms before agreeing to a plan.