Home Loan Modification Explained

Important: The content below is not professional advice, including legal, financial or advice as a foreclosure consultant.

What is a Home Loan Modification?

A home loan modification is a transaction in which the lender agrees to modify any or some of the terms of your mortgage. This is a process where an existing note is modified, but not cancelled. Changes may include: extending the term of the loan, changing the monthly payments, changing the interest rate, etc.

A loan modification is NOT a refinancing of the home loan.

Purpose of a Home Loan Modification:

A home owner can have their loan modified for a number of reasons. The most common reason a lender will modify the terms of a loan is because a homeowner is having a financial hardship and is no longer able to afford the monthly mortgage payments. This can result in a default on the loan and ultimately a foreclosure. This cost's the lender and the homeowner a great deal of time and money, but the homeowner also severely damages their credit rating. To avoid this negative outcome the lender may negotiate with the home owner to change the terms of the loan in order to make the monthly payment affordable.

Who can provide a Home Loan Modification?

Any homeowner can go to their lender and ask them to modify the terms of the loan. However, the process is lengthy and involves a number of important financial and legal concepts that the homeowner should fully understand in order to get the best result.

Many homeowners turn to Home Loan Modification Services to provide this service for them. The loan modification service understands the entire modification process, have the necessary relationships with the lenders and legal resources to ensure a fair and legal negotiation of the terms of your loan. Loan modification companies normally work for a fee. Homeowners should carefully assess if the fee to modify the loan will be easily surpassed by the money saved under the new terms of the loan. In other words if it costs the home owner $1,000 to modify a loan, the new terms of the loan should save them well over $1,000 over the course of the loan. It's important to note that if a professional service can achieve a $50/month savings over what you can do on your own it would take only 24 months to cover that cost.

What exactly is done when I modify my loan?

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

• A reduction in interest rate, or a change from a floating Adjustable Rate Mortgage (A.R.M )to a fixed rate, or in how the floating rate is computed.
• A reduction in principal - The amount owed on the loan.
• Reduction in late fees or other penalties.
• Lengthening of the loan term - Change a 15 year loan in to a 30 year loan.
• Capping the monthly payment to a percentage of household income.

Typically a borrower can be current, late, in default, in bankruptcy, or in foreclosure at the time the application for a loan modification is made. The programs available will vary according to what your payment status is.

What about Government Modification Programs?
The state and federal government may structure a mortgage modification program as voluntary on the part of the lender, but may provide incentives for the lender to participate. A mandatory mortgage modification program requires the lender to modify mortgages meeting the criteria with respect to the borrower, the property, and the loan payment history. The homeowner must meet specific financial requirements to qualify for a Government based program. These Government programs are detailed out here

If you do not qualify for a Government based homeowners program and you want to understand what other options are available to you we will connect you with a free consultation. Just provide the details on your situation below and a home foreclosure prevention expert will contact you and answer all your questions. .

	Please provide the details of your situation so a foreclosure expert can quickly review your case and provide you with realistic options to save your home.
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MM/DD/YYYY Monthly Mortgage Payment:  Loan Type:  Please Select Conventional FHA Loan VA Loan Other Total Credit Card Debt: Please select None $3,501-$4,000 $4,001-$4,500 $4,501-$5,000 $5,001-$6,000 $6001- $7,000 $7,001-$8,000 $8,001-$9,000 $9,001-$10,000 $10,001-$12,500 $12,501-$15,000 $15,001-$17,500 $17,501-$20,000 $20,001-$22,500 $22,501-$25,000 $25,001-$27,500 $27,501-$30,000 $30,001-$32,500 $32,501-$35,000 $35,001-$37,500 $37,501-$40,000 $40,001-$42,500 $42,501-$45,000 $45,001-$47,500 $47,501-$50,000 $50,001-$52,500 $52,501-$55,000 $55,001-$57,500 $57,501-$60,000 $60,001-$62,500 $62,501-$65,000 $65,001-$67,500 $67,501-$70,000 $70,001-$72,500 $72,501-$75,000 $75,001-$77,500 $77,501-$80,000 $80,001-$82,500 $82,501-$85,000 $85,001-$87,500 $87,501-$90,000 $90,001-$92,500 $92,501-$95,000 $95,001-$97,500 $97,501 -$100k $100k - $150k $151k - $200k Over $200,000 Home Type:  Please Select Single Family Multi-Family Condominium Town Home Mobile Home Manufactured Home Total monthly 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$850,000-$874,999 $875,000-$899,999 $900,000-$924,999 $925,000-$949,999 $950,000-$974,999 $975,000-$999,999 Over 1,000,000     Mortgage Balance: Please select None $10,000-$12,499 $12,500-$14,999 $15,000-$17,499 $17,500-$19,999 $20,000-$22,499 $22,500-$24,999 $25,000-$27,499 $27,500-$29,999 $30,000-$32,499 $32,500-$34,999 $35,000-$37,499 $37,500-$39,999 $40,000-$42,499 $42,500-$44,999 $45,000-$47,499 $47,500-$49,999 $50,000-$52,499 $52,500-$54,999 $55,000-$57,499 $57,500-$59,999 $60,000-$62,499 $62,500-$64,999 $65,000-$67,499 $67,500-$69,999 $70,000-$72,499 $72,500-$74,999 $75,000-$77,499 $77,500-$79,999 $80,000-$82,499 $82,500-$84,999 $85,000-$87,499 $87,500-$89,999 $90,000-$92,499 $92,500-$94,999 $95,000-$97,499 $97,500-$99,999 $100,000-$102,499 $102,500-$104,999 $105,000-$107,499 $107,500-$109,999 $110,000-$112,499 $112,500-$114,999 $115,000-$117,499 $117,500-$119,999 $120,000-$122,499 $122,500-$124,999 $125,000-$127,499 $127,500-$129,999 $130,000-$132,499 $132,500-$134,999 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