I get questions all the time from clients about loan modifications. What are they? Do I qualify for a loan modification? How can I make my bank give me a loan modification? The short answer is that loan modifications are an enigma. There are no cut and dry answers for these often proposed questions. First, borrowers need to understand what a loan modification actually does to their mortgage.
A Loan Modification is a permanent or temporary change in one or more of the terms of a borrower's loan, which theoretically results a lower payment that the borrower can afford. Because of the current economic climate and high unemployment rates, many people are simply unable to afford a mortgage payment with the reduction or nonexistence of income.
So what do you have to do to get a loan modification? First, you will need to be delinquent in your mortgage. There are various authorities who say that your lender will not even consider a loan modification if you are not at least 30 days delinquent. For many people, this is a reality; they simply do not have the income to pay the mortgage. However, for those who just feel that the mortgage payment is too high, or they are barely making the payment, delinquency is a roll of the dice. If you decide to attempt a loan modification and you become delinquent, you must be prepared for the negative side effects. This includes a dramatic drop in your credit score, and the possibility that your lender may initiate foreclosure proceedings during the qualification period to determine whether you even qualify for the loan modification. It takes a person with thick skin and an iron will to have success in this process. It's not unusual for it to take 3-6 months of calls, faxes, emails, letters etc. to get help before you get relief. I have found that the person that is willing to be the greasy wheel and never give up is usually the first person that gets the attention they deserve.
If you are struggling to make your mortgage payments you should explore your options with the experienced attorney's at Marrs & Terry. We offer a free consultation to discuss your alternatives. Loan modifications can be extremely time consuming and the experts at Marrs & Terry can help you understand the process.
