Portrait of a senior executiveA mortgage loan modification is an agreement between you and your lender to help you afford your home. You are most likely paying too much for your house, and a loan modification can help you lower your monthly payments, interest rate, and extend or shorten the loan terms.

What is a loan modification program?

Mortgage loan modification, also known as home loan modification, is the single most effective method of lowering your monthly mortgage payment, interest rate, adding past dues to the mortgage balance, and extending your loan period. The purpose of a loan modification is to decrease your payments to an amount that you can afford, and can help you:

  • Lower interest rate
  • Lower monthly payments
  • Stop foreclosure
  • Waive unpaid late fees
  • Forgive legal fees
  • Reduce your loan balance
  • Convert from an ARM to a fixed
  • Save your home

If you’re already behind on payments, or its apparent that becoming late is inevitable, its time to negotiate a workout plan with your lender so that you can avoid foreclosure.  A loan modification is a type of workout plan, as well as forbearance, deed-in-lieu, short sale, and other loss mitigation programs.  Our attorneys can help you choose the best option to fit your situation.

happy togetherA loan modification, also known as a loan workout, in rare cases may allow a principal balance reduction, or “forgiveness” of a portion of the amount that you owe on your mortgage.

Are you eligible for mortgage modifications?

You may be eligible for a loan modification regardless of whether or not you are late on the mortgage and your equity position in the house. Most lenders do not want to grant mortgage modifications unless you are upside down on your mortgage, however you do not have to be underwater. Some programs require you to have had the mortgage for more than 12 months.

A loan modification may be suitable for you if you are having difficulty making your monthly mortgage payments on time. It is important to have a legitimate hardship; acceptable hardships include:

  • Job loss
  • Reduction of income
  • Death in the family
  • Separation or divorce
  • Decrease in assets
  • Forced job relocation
  • ARM adjusting
  • Increased expenses

Do you need professional help?

It is imperative that you seek the advise of an Attorney as well as a Loss Mitigation Specialist. Some loan modifications may be negotiated by borrowers directly, however, without professional assistance the majority of these loan workouts result in horrific terms for the homeowners. It is strongly advised that you do not attempt to learn the loss mitigation process by way of your own foreclosure; incorrect submission can lead to a denial of your loan modification request.

Your Attorney should be reputable, BBB Accredited, and knowledgeable in all facets of Loss Mitigation. Your home may not be foreclosed upon while your file is in a review status and your Attorney is negotiating with your lender.