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What is a loan modification?

It is a permanent change to one or more terms to your home loan. It allows your loan to be reinstated and often results in a lower payment you can afford!

Can the lender add late charges into your loan?

The Department of Housing and Urban Development indicates that late charges should be waived at the time of loan workout. The practice varies by the type of loan.

Can the bank do an interior inspection of your home if they have concerns about the condition?

Yes, the lender has the right to conduct any review they deem necessary if they believe the property may be adversely affected.

How do I know if I will qualify?

Do or did you have a identifiable hardship?  Can or will you be able to make the new modified payment?  These are major qualifying factors.  A detailed financial statement and proof of income to demonstrate your ability to make the new payment will be crucial.

Do I have to be delinquent to get a loan modification?

Not necessarily!  Many lenders are accepting applications if you can demonstrate imminent risk due to upcoming rate increases or other hardships that may make it impossible to pay your current mortgage payment.

Will a loan modification help you stop a foreclosure?

Yes, that is the goal! By working with your lender for a solution, your loan will be brought current and the foreclosure process will be halted.

Can I apply for a loan modification myself, or should I pay someone to represent me?

This is totally up to you and your comfort level negotiating with your lender and your knowledge of the loan modification process. Whatever you decide, learn all you can about the process, your legal rights, and what it takes to get approval.