Loan Modification

A Loan Modification is a change made by the Lender to your existing loan terms, as a result of non-payment. To apply for a loan modification, the Lender will require you to complete and submit a financial package, which they will evaluate. After all of your documents have been received and evaluation is completed, two major things happen:

The Lender will make a decision as to whether or not they will grant you a modification. If they do offer you a modification, the Lender will provide you with their proposed “changed” loan terms. Food for thought: Oftentimes loan modifications actually result in higher monthly payments for the borrower… I know, right!?!? For a clearer picture of what a loan modification looks like, consider this example:

After suffering from unforeseen health issues, Jose’s income takes a hit. Before he knows it, Jose is 3 months behind on his mortgage payments. Confident that he will eventually turn things around, Jose decides to try and keep his property. After a long and thorough review of his hardship and financial documents, the Lender offers Jose a loan modification, or change in his current mortgage terms.

It’s important to note that your Lender is not obligated to halt the foreclosure proceedings during the loan modification review process. It is also crucial to understand that your Lender reserves the right to deny your request for mortgage modification, if they feel you are still not financially capable of making the new payments.

So, is a loan modification right for you?

If you are a homeowner who is adamant about keeping your home and believe you can make the payments on the changed loan terms (even if the monthly payments increase), then applying for a loan modification may be the right choice for you.

If you are a homeowner who cannot physically and/or financially keep up with the property and its mortgage payments, then a loan modification may not be the best choice for your needs.

Contact us today so that we can help you navigate the various options that might apply to your own situation.