All About Mortgage Loan modification Process

ALL ABOUT

MORTGAGE LOAN

MODIFICATION

NATHAN A BERNEMAN

Americans hold an estimated $10 trillion in mortgage debt for a family residence.

The average mortgage for first-time homeowners is $260,386, but the combined cost of the mortgage, utilities, and insurance can range upwards of $1,500.

You could modify or refinance your home loan. Or, you can file for bankruptcy.

What is a Loan Modification?

A loan modification is a change to your terms to mitigate loss. The change can extend the number of years for repayment, forebear, reduces your principal balance, or reduces your interest rate.

Modifying a Mortgage Loan?

The modification of your mortgage loan should get you out of your current haphazard situation and allow you to get back on your feet financially. The goal of the loan modification is to make your payment more affordable, but the goal for your lender is to avoid a default or the loss of any more money than necessary.

Depending on your loan, your situation, and other factors, the lender can offer modification options, including:

A loan extension--from 30-to40 years, for example.

• A lowered interest rate.

• An agreement to add the arrears to the loan debt.

• The conversion of the loan from an adjusted-to-fixed-rate mortgage.

• A possible deferral or even forgiveness of part of the principal on your loan.

While the lender doesn't technically have to offer generous terms or offers to help mitigate your financial hardship, but it's often worth it for the lender to work with you so they can avoid the cost and inconvenience of foreclosure.

Depending on your financial situation and hardship, you may also be eligible for other government programs that can get you even more favorable terms. The Flex Modification Program, for example, is designed to prevent foreclosure.

Even if you aren't eligible for government programs, your lender may offer a modification program to meet your needs.

Who Can Qualify For a Loan Modification?

You might qualify for a loan modification if your loan is owned by a bank or mortgage company.

You could also be eligible if your loan is a Fannie Mae or Freddie Mac loan. Other qualifying factors could include:

Your house value has declined so such a degree that you now owe more than your home is worth.

You're spending more than 31% of your income on your housing costs every month.

Your current financial situation puts you in danger of default (or you may have already defaulted).

How Can a Bankruptcy Attorney Assist You Get Loan Modification?

A loan modification can happen concurrently or separately from your bankruptcy. Either way, a bankruptcy attorney should be able to assist you in navigating the process.

He or she can review the paperwork, make sure the agreement is in your financial best interest, and consult with you on how to best accomplish the loan modification.

The law does not require a lender to offer a loan modification. The lender is only required to review your application. Having a lawyer in your corner to review, offer advice, and to advocate on your behalf with the lender is always beneficial.

NathanAbernamanAPC

bernemanlawfirm.com

8054927045

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