Home loan modification describes the process where the borrower and mortgage company work together to modify the conditions of a home loan agreement. Generally speaking, any debt obligation is able to be modified with certain terms altered however it is normally used with mortgage loans.
Over the last several years the amount of loan modifications used by homeowners has grown exponentially from just a handful to thousands. The reason for the sudden increase in modifications is the current mortgage and financial crisis which has impacted real estate markets across the country.
Mortgage modification has proven such a relief that the government has recently passed a mandate to mortgage companies to extend more modification opportunities to underwater borrowers.
Loan modification alters the initial mortgage contract to assist the mortgagee in one or more ways including; reducing interest fees and lengthening the repayment schedule. Reducing monthly home loan payments is perhaps the most widely used feature of loan modification.
Lots of mortgage holders have found themselves unable to make payments after experiencing a dramatic increase in the periodic costs. Whether a result of a known increase or rate readjustment, lots of homeowners have suddenly found themselves with a mortgage payment they are unable to pay. Loan modification allows many homeowners to lower rising costs.
Mortgage holders who have stopped making their monthly payments or are in foreclosure can request mortgage modification relief. Depending on the specifics of your financial situation the specific options available to you could vary.
Home loan modifications are the result of negotiations between the borrower and lender and must be agreed to by both sides. Usually, mortgage companies are amenable to talk about changing contract terms if there is a chance the mortgage holder will default. Many times a reduced monthly payment is more than a lender could get from a default sale of homemaking lenders prepared to accept reduced monthly amounts.
To determine if you are a candidate for a loan modification you would need to speak with your mortgage company. There are several factors they will review when considering your application for assistance.
Many homeowners are receiving mortgage assistance find out how to are eligible for mortgage help.