For many people at risk of foreclosure, the last chance at saving the home is to get a loan modification. A loan modification is basically the restructuring of the terms of a mortgage loan. This restructuring allows for monthly payments to be adjusted to fit the borrower’s budget.
Do I qualify for a loan modification?
To find out if one qualifies for a loan modification, a borrower has to apply through his current lender. The way a borrower prepares and goes about the application process has a great impact on whether or not he will successfully obtain the modification.
It is in the borrower’s best interest to get legal representation to counteroffer the loan modification, in case the lender were to deny the modification. An attorney will be able to come up with a suitable counteroffer for the lender, such as workouts — which include repayment plans and forbearance. In the case that a borrower is about to lose the home, forbearance might be the best option. This method will allow a borrower to make partial payments or even skip some payments temporarily, with good faith that he will become current again in the future.
The Benefits of a Loan Modification
If a borrower is approved for the loan modification, he will obtain a lower interest rate, an extended time frame to pay back expenses, or may even have his debt forgiven. It is important to keep in mind that the modification does not decrease the actual amount that is owed, it just extends the period of time, and reduces the payments that need to be made each month. These agreements can often vary depending on the borrower’s situation and on the lender as well.
If you are struggling to make payments on your mortgage, contact the experts at Graham Legal today. We can help you apply for a loan modification by submitting all the correct documents to your bank and following up to reduce any lagging in the process. Our team can also review the proposal of the offered loan modification from your bank and lend advice on whether or not it is a good deal. Call us today for a free consultation.