Loan modification is not a myth. It is possible to get your initial loan modified to more reasonable payment terms. This can be especially helpful when you’re in the middle of a divorce. However, the problem is that often the banks and lending companies can be unreasonable and refuse to negotiate, especially if you have been late or skipped payments. Lenders do not want to foreclose on your house, but often this is their only option if you are unable to pay the mortgage.
What is Loan Modification?
A loan modification is a change to a loan contract agreed by both the lending company and the borrower. In most instances it is much more profitable for a lending company to continue with the loan rather than foreclose on the home. Furthermore, rate reductions and fixed interest rates can all ensure that your loan is affordable and that you can make the payments every month. With a loan modification, both the lender and the borrower are happy. There is no risk of foreclosure and no need to declare bankruptcy.
Do I Need a Loan Modification?
There are a number of factors that can affect your current loan. Perhaps you have lost your job and are not bringing in as much money as anticipated. Perhaps you and your spouse have split up, causing financial issues. Perhaps you have welcomed a new addition to the family and incurred related expenses. Perhaps you have suffered a serious medical injury and now are dealing with the expenses of surgeries and other medical assistance. Or, perhaps the rising cost of living and the overdue credit card bills are simply taking a toll on your life.
Factors to Loan Modification
Every loan agreement is different. However, some of the things we will look at when determining if loan medication will work for you include:
- The nature of hardship causing mortgage issues
- The ability to pay
- The amount owed
- The equity in the property
- The future financial situation
For more information on the loan modification procedure or how to file for a loan modification, contact the law offices of Heimerl & Lammers. We can provide you with a free consultation and help you determine if loan modification is the best option for you.