Top Ten Questions About Loan Modifications

Are you having a hard time paying your mortgage? Loan modification may be the answer you have been looking for. As hard as it may be to believe, most lenders would rather you keep your home and receive monthly payments than force you into foreclosure during a time when the real estate market is at its lowest.

Are you still hesitant to take a “leap of faith” in seeking a loan modification? Here are the top 10 most frequently asked questions struggling homeowners ask:

1. Should I get help from a loan modification company: This is a personal preference, but there are a couple things to consider when making this decision. If you feel like you can handle the stress of foreclosure and you have the time and know how to prepare the essential documentation needed to apply for a loan modification, then go ahead. But if you do not, then you should seek the knowledge and experience a loan modification company or law firm can provide.

2. Can loan modifications help prevent foreclosure: Absolutely! Loan modification can be your best friend. It could also be your only chance to save your home. Keep in mind that the federal government now provides monetary incentives to banks that participate in the Home Affordable Modification Program (or HAMP) and grant successful loan modifications to borrowers. Pair this development with the idea that it may be more profitable for lenders to allow you to stay in your home rather than foreclose, and the chances of getting approved for loan modification may rise. It’s a win-win situation for all parties.

3. Do I qualify for modification on my loan if I am not behind on payments: It may be possible but the success rate is not high. Your mortgage lender needs to see that you have a financial hardship.

4. How does the Obama plan affect my loan modification application: The federal government has set aside billions of dollars to give to banks to support loan modifications for homeowners in need.

5. Can the lenders add late charges to the loan modifications: The late charges may be set aside when the lender is considering a loan modification for his/her client.

6. How do I qualify for a loan modification: Typically a modification is awarded to an individual who has recently lost his/her job, has suffered a reduction in income, lost a spouse, gone through a divorce, or experienced financial hardship due to unforeseen medical conditions and expenses. However, you must also be able to demonstrate an ability to afford a modified mortgage payment, along with all of your other monthly expenses.

7. What situations can guarantee me qualification for a loan modification: The loss of employment may be the most common hardship that homeowners who receive a loan modification face. But it is important to know that a valid hardship is but one of multiple qualifying factors for a loan modification. And remember, there are NO guarantees.

8. Is it possible that late or missed payments can be added to my new loan modification: Absolutely. It is likely that your past due amounts could be added to and/or spread over your mortgage term.

9. How does a loan modification affect my credit history: A loan modification does not affect your credit history. The process of obtaining a loan modification will. Once you go behind on your mortgage payments, your lender will begin to report this to the credit bureaus every month, until you either bring your mortgage current or obtain a loan modification. Upon making your first payment (after making your trial mod payments), your lender will then report your mortgage to the credit bureaus as being paid current. This will help raise your credit score over time.

10. The most frequently asked question -- What is a loan modification: Most struggling homeowners don’t realize that there are options before foreclosure. Loan modification is one of them. A loan modification is a reestablishment or adjustment of the mortgage loan terms that makes it reasonably affordable for the borrower to make his/her monthly payment.

So after reading through these most frequently asked questions, it’s important to choose a qualified modification agent. It can make the difference between keeping your home or sending it into foreclosure.

For loan modification help, call now The Mortgage Law Group now: (888)591-6555