The primary purpose of loan
modifications is to assist distressed borrowers who are
unable to meet their mortgage obligations. Therefore, a
loan modification, as opposed to a refinancing, enables
a servicer to change the terms of a loan to better
enable the borrower to stay current or cure a loan
without retiring the existing loan. Loans can be
modified by extending the amortization terms, adding
balloon payments, decreasing the mortgage rates,
forgiving principal or interest payments, and extending
the fixed-rate period of a hybrid ARM loan, among other
things.
This means the lender will make changes to the original
loan. Those can be changes to your interest rate,
payment schedule, loan balance, late charges, length of
loan, pre-payment penalties, the handling of past-due
payments, and the like. You do not have to be behind in
payments to negotiate a Loan Modification.
What is Loan Modification?
Loan modification is a process that allows homeowners and
lenders to change the terms of a loan in order to help
the borrower stop foreclosure. A loan modification is
NOT a new loan. It is the renegotiation – or loan
restructuring – of an existing mortgage note. For
homeowners behind on their mortgage, or those with a low
credit score, a loan modification is often the only
option available because they are unable to get approved
for a mortgage refinance or a short-refinance.A loan modification can be done in several ways or
combination of ways listed below:
- the loan's interest rate may be decreased
- the interest rate could be changed from an
adjustable to a fixed rate
- the period of time the borrower has to pay the
loan back can be lengthened
- the type of loan could be changed altogether
Many borrowers are facing foreclosure because their
interest only or variable rate loan interest terms have
sky rocketed beyond what they could have imagined. A
loan restructuring is an agreeable way for both the
lender and the borrower to avoid the cost and hassle of
the foreclosure process. Not all homeowners will
qualify for the loan modification process, but some may
be able to save their homes. We will coordinate
the negotiations with your lender from start to finish.
To find out if you qualify, call 1-800-355-9220 x 103
and speak with our modification department today. We
will do all we can to keep you in your home.
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