Frequently Asked Questions
What is a loan modification?
A loan modification is an agreement between a lender and a borrower to change the original terms of a loan in order to make payments more affordable.
What are the features of a loan modification?
Loan modification can be accomplished through a variety of methods. The interest rate on a loan can be temporarily or permanently reduced. An adjustable interest rate can be changed to a fixed interest rate. In some cases the principal balance owed on the mortgage may be reduced. One or more of these methods can be used to reduce the monthly payment for the borrower.
Why would a lender modify my loan?
The primary reason a lender would agree to a loan modification is because they believe it to be in their interests. Foreclosure is a costly and lengthy legal process. After the foreclosure, the bank must sell the home, often as a distressed asset.
How does the lender benefit from a loan modification?
If lenders can keep borrowers in their home by temporarily reducing payments or modifying terms of the original loans, the costs can be significantly less than foreclosure. Since most loan modifications do not reduce the principal balance of the loan, the lender will still recover the amount of the loan, just over a longer term or at a lower interest rate.
How long does this take?
Once your application is complete, we begin working right away. During this busy time you must allow 4-8 weeks before a final settlement is reached.
When is the best time to apply?
The sooner you act the better a solution we can achieve. Delay often results in additional cost and expense without any benefit to the homeowner.
Can I do this myself?
While you can do this yourself, there are many benefits to placing this important financial matter in the hands of experienced experts. Our knowledge and familiarity with the lenders and the process can often result in faster and better outcomes.
