What is a mortgage loan modification?

If you’re like millions of other homeowners today you’re probably having trouble making your mortgage payment. Are you behind in making your mortgage payment? Has your mortgage company or loan servicer contacted you about your mortgage payment being late?  Have you received notice that your mortgage company or loan servicer has started the foreclosure process on your home? If you answered yes to any of these questions then a mortgage loan modification program may very well be the solution you’re looking for to stop foreclosure on your home and allow you and your family to remain there.

A Loan Modification is a permanent change in the terms of your existing loan. Your mortgage holder may restructure your loan by reducing the interest rate, extending the length of the loan, lowering the principal balance, reducing or eliminating any overdue back payments or late fees, as well as many other options to allow you to reduce your monthly mortgage payment to an amount you and your family can feel comfortable with.

If you’re behind on your mortgage payments, struggling to make your mortgage payments, expect an adjustment that will cause you to fall behind on your mortgage payments, if you’re facing foreclosure, or fear foreclosure is eminent, than a loan modification is the answer.

Because a mortgage loan modification is not a refinance there is no need to re-qualify for a mortgage. You already did qualify! There are far fewer “hoops” to jump through to successfully achieve a loan modification. You, as a homeowner, can navigate the hurdles to a loan modification on your existing mortgage. The key to success, like everything in life, is KNOWLEDGE. It’s important to realize that even if you plan to employ a professional loan modification company to negotiate a loan modification KNOWLEDGE is still critical for the homeowner.

Why would your mortgage holder agree to a loan modification? Simple! Your bank would rather change the terms of the loan to a payment that you can afford than take the property back via foreclosure. A loan modification will allow the mortgage holder to keep the loan on their books at full value rather than being forced to mark it down according to it’s current perceived market value (referred to mark-to-market).

Finally, what can you, the homeowner facing foreclosure, or future interest rate increases, expect the results of a loan modification to be? It’s not uncommon to negotiate a new fixed rate 30 year loan at below market interest rates. We’ve witnessed interest rates lowered by 30% - 50% or more with reductions in the principal as well and forgiveness of late payments and penalties!!

What’s the determining factor of YOUR loan modification result? YOUR Knowledge, negotiating skills, your lender’s current situation, how much equity you have in the property (ideally you owe more than your property is worth), and your focus.

Your first step to a successful loan modification? Get our “Complete Loan Modification Guide” and read it thoroughly. Then, armed with the knowledge our industry insiders provide you with, start your loan modification.