LOAN MODIFICATION
WHAT IS A LOAN MODIFICATION?
A loan modification is a permanent change in one or more of the terms of a loan allowing the loan to be reinstated, resulting in a lower payment that the borrower can afford.
WHY LENDERS CONSIDER MODIFICATIONS
All or a portion of the outstanding principal and interest, past due escrow, late fees and even costs may be rolled into the loan modification and thus will not be lost revenue to the lender. Since they are spread over a long period of time, they do not pose a problem to the borrower.
BASIC REQUIREMENTS FOR A LOAN MODIFICATION
- Your monthly mortgage must be affected by a verifiable reduction in income.
- It is required that you are currently employed or have another source of stable and predictable monthly income that is proveable.
- The home for which you are seeking to obtain a loan modification typically must be your primary residence.
AVOID LOAN MODIFICATION SCAMS
Be very careful if you choose to use a loan modification company that takes a fee up front to negotiate your loan modification for you.
They cannot guarantee a successful modification and can end up costing you another month's mortgage payment. in exchange for false hope.
They cannot guarantee a successful modification and can end up costing you another month's mortgage payment. in exchange for false hope.
CONTACTING YOUR LENDER
If you have fallen behind on your mortgage payments, do not be afraid to call your lender to request a loan modification or other pre-foreclosure options.
