Loan Mod

 

Loan Modification, or loan mod, is a process of modifying some terms of your loan in coordination with your lender. The modification will help you to make monthly payments and avoid foreclosure. Generally, loan modification involves:[br]

• Reduction in interest rate

• Extension of the term of your loan

• Both

How Do You Qualify for Loan Mod?

 

 

Loan Modification, or loan mod, is a process of modifying some terms of your loan in coordination with your lender. The modification will help you to make monthly payments and avoid foreclosure. Generally, loan modification involves:[br]

• Reduction in interest rate

• Extension of the term of your loan

• Both

How Do You Qualify for Loan Mod?

 

A mortgage modification is generally conducted when both involved parties i.e. the borrower and the lender mutually agree to devise a solution in the form of better loan terms. Some of the factors your lender will consider while determining your eligibility for loan modification are:

• Nature of hardships that have caused your mortgage problems

• Your ability to pay

• Amount owed

• Equity in the property

• Future financial situation

• What option makes better financial sense for them in the long run– to foreclose or to pursue a loan workout with you and or modify your loan 

Loan Mod: Myths and Facts[br]

 

Following are the myths associated with loan modification as to when a borrower can take help of this process.

 

Myth 1: Do you have to be late on your mortgage payments or miss them before you can become eligible for loan modification?

Fact: Although late or missed payments are not a pre-requisite, they certainly help to fortify your case. If you are facing this distressful situation, there is high probability of that your lender will give you more attention and help.

 

Myth 2: Hope Now and 995-HOPE programs protect the best interests of borrowers.

Fact: This is both true and false. According to a survey conducted by msnbc.com, most of the callers to the Hope Now hotline remained frustrated. Readers reported difficulty in getting through to hotline counselors, little more than cursory review of their cases, a lack of follow-up and confusion over who is eligible for help.

 

Myth3: Lenders offer principle reduction to borrowers who owe more than their home is actually worth.

 

Fact: It is a very rare occurrence and is usually done only when a borrower has a 1st and 2nd mortgage and the 2nd is negotiated down and settled for 10-20 cents on the dollar.