Loan Modifications


A Benefit for Lenders and Borrowers Both

If you are struggling to keep up with your mortgage payments, you may be eligible for a loan modification to reduce your interest rate or your loan balance and ease the strain of your monthly payments.

Lenders came to the table somewhat reluctantly, but out of necessity must make some changes to try and reduce the foreclosure rate. If a lender can make some concessions to a property owner through a loan modification, the lender’s loss is generally much less than they what would result from a foreclosure. In our current market, foreclosed properties often have loan balances close to or above the amount of the market value. By the time the lender goes through the lengthy foreclosure process and offers the property for sale at a reduced value in a market heavy with other foreclosed properties, the losses pile up.

It makes good business sense for lenders to negotiate with borrowers to keep them in their homes. They are further encouraged to mitigate their losses by the FDIC in an overall effort to stabilize mortgage financing and the real estate market.


The Basics of Loan Modification

Loan Modifications give borrowers a chance to renegotiate the terms of their existing loan. A successful result may include:

• Interest Rate Reduction
• Extended Payment Terms (up to 50 yrs)
• Principle Reduction

To qualify for a loan modification, a borrower must meet at least one of the following criteria:

1. High Loan-to-Value (90% or higher)
2. Bad credit due to late payments on credit cards, mortgage, medical bills, etc.
3. Adjustable Rate (that has or will change in the future)
4. Option ARM or Pick-A-Pay loan
5. Temporary or permanent financial hardship, such as income reduction, health problems
     or divorce
6. High Debt to Net Income Ratio
7. Non-Owner Occupied is okay


Get the Right Help for Your Loan Modification

Every borrower has the right to call their lender and try to initiate a loan modification. If you have already tried to do this, you may have found how difficult it is to get the help you need from an understaffed, overworked modification department.

If you are successful at finding the right person in the right department and can begin the process, you then have to put on your negotiator hat. Very few of us are professional negotiators and it is even more difficult to negotiate on your own behalf. Additionally, the person you are working with at the bank is working on the bank’s behalf and not yours.

Loan Modification Consultation
•	Attorney-based program
•	Dept. of Real Estate Approved
•	Successful Loan Modifications
•	As Low as 3% interest, 50 year term

To find out more about the loan modifications and how an attorney-based process can help you achieve a successful result, email Paula Cochran at paula@theloanlady.net.