| Loan or mortgage modification means adjusting an | | | | are eligible for a loan modification. Going purposely |
| existing loan by a lender in response to a borrower's | | | | default to get a loan modification can affect your |
| long-term inability to repay the loan amount. It allows | | | | eligibility. Make sure you are effective in working with |
| the loan to be reinstated, and result to the mortgagor | | | | your lender. |
| can afford. It is much like a mortgage refinance in that | | | | The state and federal government may arrange a |
| the objective is to find you a more affordable | | | | loan modification program as charity on part of the |
| mortgage payment depending on your financial | | | | lender. A compulsory loan modification program |
| situation. Instead of looking for a new loan, you will just | | | | involves the lender to modify mortgage meeting the |
| simply modify the terms of your existing loan. A lender | | | | criteria with respect to the borrower, the property, and |
| might be open to modifying a loan because the cost of | | | | the loan payment history. |
| doing so is less than the cost of default. | | | | A loan modification is usually a win-win situation, where |
| In many cases, a loan modification is recommended to | | | | the lenders get their money in a revised fashion and |
| owners that have a financial hardship which is | | | | borrowers get a new chance to support their |
| preventing them from making their monthly loan | | | | mortgage payments at a reduced cost. |
| installments. Most how are eligible for these type of | | | | The loan modification process can be lengthy and |
| mortgage modification programs have already missed | | | | sometimes frustrating and confusing for many discreet |
| one or more payments. | | | | borrowers. |
| Mortgages are modified to the benefit of the borrower | | | | A well written and convincing hardship letter is an |
| in many ways including reduction in interest rates. By | | | | important part of a successful mortgage loan |
| reducing your loan interest rate, you will have to pay a | | | | modification application. Your lender will be willing to |
| lower monthly installment and therefore have a less | | | | grant your modification application if you can |
| burden on your shoulders. More than 50% of the loan | | | | demonstrate an ability and willingness to make the |
| borrowers choose to reduce their principal amount. By | | | | new lower loan payment now and in the future. Make |
| reducing your principal amount, you will be paying a far | | | | sure you cover the 3 critical elements that your lender |
| less installment. Reduction in late fees or other penalty | | | | needs to know in your own hardship letter by following |
| fees are also important. By modifying your late fees, | | | | a simple Hardship Outline. |
| you can save your monthly installment money this | | | | It is critical that before getting in touch with your bank's |
| month and pay them later. | | | | loss alleviation department or your loan lender/institution, |
| The borrower can be current, late, defaulter or in | | | | you should learn about the market, the method and |
| foreclosure at the time the application of modification is | | | | any thing that might be appropriate. This would help |
| made. If you have experienced a documented | | | | you to make the correct decisions and avoid being |
| hardship or change in financial circumstances or | | | | demoralized when you're already disappointed with |
| missed three payments (90days or three months), or | | | | your current pecuniary situation. |
| occupy the property as a primary residence then, you | | | | |