What is loan modification? Loan modification is a finance option that alters the terms and conditions which apply to a current loan. The loan may be a mortgage or another type of home loan, a business loan, or a personal loan extended by a lending institution.
One of the most common reasons for a loan modification involves some type of hardship which impacts the ability of the borrower to continue making payments according to the current schedule.
The loan modification may include altering the current loan by reducing the monthly payment to a sum that the borrower can reasonably manage; this alters additional payments on the back end of the loan but doesn't negatively affect your credit rating. The lender may also make adjustments on the interest rate reducing the amount of interest that must be paid on the loan.
The loan modification is only extended after the lender has reviewed the current situation and determines that altering the existing loan is in the best interests of all concerned parties.
TARP (Troubled Asset Relief Program) funds are monies utilized by the United States Treasury during the 2008 financial crisis in an attempt to stabilize the American economy. These funds were used to rescue financial institutions deemed "too big to fail," out of concern that failure of major financial institutions could plunge the American economy into a depression; $700 billion were devoted to TARP.
These funds were part of a larger bill known as the Emergency Economic Stabilization Act (EESA), passed in October 2008 and signed into law by President George Bush. TARP was designed to get so-called toxic assets off the books of major banks.
Some of the programs for which TARP funds were used included foreclosure abatement initiatives designed to keep people in their homes, loans to the American automobile industry, and assistance to insurance giant American International Group (AIG).
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