LOAN MODIFICATION

1. If you are delinquent on your mortgage payments and need help getting back on track, call us.
2. If you are in foreclosure and need help getting out of foreclosure and getting into an affordable mortgage payment, call us.
3. If you have an adjustable rate loan and are afraid you will not be able to afford your mortgage payments when the loan adjusts, call us.
4. If you owe more than your property is worth and would like to try to negotiate down your current balance, call us.
5. If you have an unaffordable interest rate or payment and would like to help getting that rate or payment reduced, call us.

Mortgage modification is a process where the terms of a mortgage are modified outside the original terms of the contract agreed to by the lender and borrower (i.e mortgagor and mortgagee). In general, any loan can be modified.

"Lenders all say they want to help mortgage borrowers stay in their homes. But when homeowners contact lenders in search of mortgage modifications, they often find getting help very difficult." 

CNNMoney.com "Tough Workouts" January 22, 2009.

Background

In the normal progression of a mortgage, payments of interest and principal are made until the mortgage is paid in full (or paid-off). Typically, until the mortgage is paid, the lender holds a lien on the property and if the borrower sells the property before the mortgage is paid-off, the unpaid balance of the mortgage is remitted to the lender to release the lien. Generally speaking, any change to the mortgage terms is a modification, but as the term is used it refers to a change in terms based upon either the specific inability of the borrower to remain current on payments as stated in the mortgage, or more generally government mandate to lenders.

Types of Modification

Mortgages are modified to the benefit of the borrower in one or more of the following ways:

• Reduction in interest rate, or a change from a floating to a fixed rate, or in how the floating rate is computed
• Reduction in principal
• Reduction in late fees or other penalties
• Lengthening of the loan term
• Capping the monthly payment to a percentage of household income

The borrower can be current, late, in default, in bankruptcy, or in foreclosure at the time the application for modification is made. The programs available will vary accordingly.

There may be modifications made at the discretion of the lender. The lender is motivated to offer better terms to the borrower because of the expectation that the borrower might be able to afford a lower payment, and that a performing loan (i.e. one in which payments are current) will be more valuable ultimately than the proceeds obtained from a foreclosure sale.