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| What is A Loan Modification? |
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A modification to an existing loan made by a lender in response to a borrower's long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default. |
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| Do I qualify for a loan modification? |
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| There are many factors that determine on what basis a lender to modify a loan, equity, income, payment history, debt and other factors. An experienced consultant loss mitigation can guide you to the best approach to take. Each case is different. If you are employed and can prove your income and whether it is in payment or future payment is unaffordable, then you probably qualify. |
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| Is a loan modification for me? |
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| If you are behind on your payments, interested in lowering your interest rates, home worth less than owed, or have bad credit then loan modification is for you. |
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| What does it cost? |
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| Fees vary among loan modification companies but are normally equal to about one mortgage payment. |
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| Can a mortgagee include late charges in the Loan Modification? |
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| Mortgagee Letter 2008-21 states that any accrued charges from being late should be waived by the mortgagee when the Loan Modification is completed. |
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| Can I do a loan modification by myself? |
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You can try to negotiate yourself but you generally you will always get a better deal by having a professional on your side that knows laws, rules, and what is a good deal in your interest.
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