Loan Modifications or Loan Remodification
A loan modification is the changing of one or more terms of a mortgage in order to help a homeowner bring a defaulted loan current and prevent foreclosure. Below are the options to modify the terms of a loan.
- Capitalize and re-amortize delinquent interest, escrow, fees, and costs
- Capitalize delinquent interest, escrow, fees, and costs in combination with extending the term of the loan.
When to get a Loan Modification
Generally a loan modification should be considered if changing one or more of the original terms of the mortgage would cure the present delinquency and/or prevent future delinquencies, and acquisition of the property by the mortgage company.
Loan modification may be considered for homeowners who:
- have experienced a hardship resulting in a reduction of income that affects their ability to pay the monthly mortgage payments
- have demonstrated their ability to recover from the hardship and now have a source of stable monthly income
- want to retain ownership of the property
- cooperate with loss mitigation depart
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