A loan modification is a permanent change in one or more of the terms of a homeowner’s loan, which allows the loan to be reinstated and results in a payment the borrower can afford. Lenders allow you to request changes to the loan in the hope that you could start making the payments again.
how does a loan modification help you?
The loan modification helps you (the homeowner) because the lender applies one of more of the following to make your payment more affordable:
- Adjusting the term (i.e.: 30 years to 40 years).
- Adjusting the interest rate.
- Putting your missed payment amount back onto the principal.
- Deferring your missed payment amount (i.e.: They put this to the end of the loan, which becomes a balloon payment).
- Reinstating the account (i.e.: Gets you out of foreclosure).
What is the loan modification Process?
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Any information presented on this website is for informational and educational purposes only and not to be construed as legal or tax advice.
Please consult your attorney or CPA for advice.