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Mortgage Loan Modification and How It Can Help

loan modification

Mortgage loan modification - How can it help?
Mortgage loan modification can give you several different options to ease your financial situation. These options include, but are not limited to:

  • Refinancing your current mortgage and/or changing any or all of the original terms of your loan.
  • Allowing you to skip one or more mortgage payments in order to become current on your loan. (These skipped payments may or may not be added to the back end of you current loan, extending the final payment date.)
  • Reducing the total principal amount you owe on your home. This option works to forgive a portion of the original amount borrowed, which can reduce your monthly mortgage obligation.
  • Reducing the current interest rate being charged on the loan. This option often involves exchanging a high adjustable rate for a low fixed one, which also can reduce your monthly financial obligation.
  • Lengthening the term of your loan. A 10 or 15 year mortgage can often be extended to a 20 to 30 year mortgage, reducing your monthly payments significantly.

What if Your Lender Tells You They Cannot Approve a Refinancing Request?

There used to be no remaining options available for those unable to refinance their original loan. Buyers were bound to the terms and conditions of the mortgage contract.

If a buyer fell into default, their property would be promptly foreclosed upon. This problem existed because there was no way for lenders to keep their doors open if they could not collect on outstanding loans. Lenders would foreclose simply to recoup the revenues they were losing due to defaults.

The borrower was trapped into either trying to sell the property usually without enough resources or time or simply give up and go along with the pending foreclosure.

Both of the above options leave the buyer in without a residence. Fortunately, mortgage loan modification is now available, offering many homeowners the chance to adjust the terms of their original mortgage agreement and give them the third option of reducing their payments and keeping their home.

Do you need a third party or a Lawyer to help you modify your loan?

Buyers can try to negotiate loan modification on their own behalf, but the success rate and level of customer satisfaction is much higher if you have someone else presenting your side to the lender.

Mortgage professionals know what can be negotiated and how far you can go to get the best deal possible under your circumstances. This is especially true in cases when there is an ’upside down’ mortgage (where the amount still owed is more then the property is worth). Although loan modification is now a possibility, it does take effort to find legitimate companies helping with loan modifications..

What kind of specialist would you need?

Someone you can trust or who comes recommended by a professional, who is poised to either handle the negotiations for you or refer you to an experienced attorney when that benefits you. Whether you use a loan modification attorney who is trained to handle negotiations and hammer out terms with lenders, or a third party consultant who can explain every step of the process to you and eliminate confusion regarding the many ambiguous issues surrounding loan modifications, your results may be better if someone other than you handles the process if you are not a "do it yourself" type personality.

There is no restriction on who you choose to help you through the loan modification process, so choose someone with experience and ethics, basically someone who would treat your loan modification the way they would treat their own with the added benefit of decades more experience that you.

Mortgage Loan Modification - Do You really qualify?

Many borrowers are still under the impression that they can only qualify for loan modification if they are on the verge of foreclosure. This is simply not true. You could possibly qualify for a loan modification program under any or all of the following circumstances:

  • There is a financial or personal hardship.
  • You have an adjustable rate mortgage which will adjust soon.
  • Your mortgage is interest only.
  • You have no credit, bad credit.
  • There is no equity in the house or you are underwater.
  • You are approaching a notice of default.
  • Your source of income is either cash, roommates, or varies dramatically.
  • You have a sub-prime loan.

Mortgage loan modifications can be done on any type of property; primary residence, second home, or investment properties, although the guidelines for modification vary. You can still qualify for loan modification even if you do not have missed or late payments, you do not have a financial hardship, or you have an ‘upside down’ mortgage.

Loan Modification Options

It may be possible for you to:

  • Stay in your home
  • Stop foreclosure
  • Lower monthly payments
  • Reduce interest rates
  • Switch from an adjustable to a fixed interest rate
  • Reduce your loan balance
  • Be forgiven a portion of the principal on your loan
  • Eliminate or postpone your penalties, fees, and even whole payments
  • Have a chance to pay back delinquencies and avoid chapter 7 bankruptcy
  • Extend the term of your loan

If you are experiencing difficulty making your monthly mortgage payments, even if you are not yet behind, a loan modification could help you relieve some of the burden caused by financial or personal hardship, and allow you to keep your home.

The time is right to take control of your situation. Much like a loan application, there are special circumstances that are more likely to have a positive outcome. 

All it takes to get started is a loan disposition analysis and plannine, to assess your current financial situation and see if you would be a good candidate for mortgage modification and if the proposed modified terms are better for the mortgage servicer than a foreclosure.

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We can help you stop foreclosure with a loan modification in the following states:

If you need help understanding your option of taking advantage of the home loan modification process, the help is available to you everywhere. The process is quite tricky and it is highly recommended that you do indeed seek legal advice before signing on the dotted line, in order receive the most efficient and cost-effective modification to your mortgage payment.

Where do I get Advice
There is advice all over the web on how to receive a loan modification; some of this advice is quite helpful, while some is quite dreadful. There is also the opportunity to hire a professional service that will help you go through the paperwork and work with the lender to help you get all the benefits that you deserve, due to a hardship. Loan modification is a process that must be understood completely and thoroughly. This article can actually offer you an insight on the process of loan modification and tips that will better help you as a homeowner save your home from the risk of a foreclosure.

Loan Modification Advice
First and foremost, it is important to determine if you are eligible for a loan modification. This requires writing a letter of hardship explaining to the lender what exactly the reason is for your late payments and the fact that you are unable to pay your mortgage. Doing a loan modification on your own requires more than just advice. Becoming educated about the process is more important. This is perhaps a good reason to hire a professional loan modification company to take part in the process. They will handle everything for you, while educating you in the progression. There is a fee charged for hiring these companies, but in turn your mortgage payment can be lowered quite a bit and professionals can even find things in your original loan papers that may prove that the lender may have broken the law during your original mortgage signing.

If you do choose to take the big leap of the loan modification process on your own, you must first contact the lender and they will lead you to the correct department, normally the loss mitigation department. You may not want to directly say that you are in the process foreclosure. We do not want the lender to think your situation is not worth their time before hearing you out. Always document anything relating to the loan modification process, every phone call and any other information you may receive during the process must be documented. Always discuss every option available with your lender, so that you may come up with the best alternative for you. It is true you will save money going directly through your lender and let’s face it, you are struggling already trying to make your payments, but professional assistance can help immensely.

No matter what direction you decide to take, loan modification will be what determines the amount of time you have in your home. If you are eligible you should act as soon as possible.



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