Thread: Loan Modification

Right now the hot topic is "loan modification" for people who are behind on the mortgage payments. Since this thread is regarding financial topics I thought it would be a great place to post information on what exactly a "loan modification" is. Here goes... Enjoy!

Loan Modification

Today the term "loan modification" is highly searched on the internet.
For good reason. As we all know the rate of foreclosures is at an all
time high and getting worse. Homeowners who are not able to make
their house payments on time are trying to figure out what their options
are so they don't loose their home to foreclosures.

All over the news we hear the term "loan modification" being bandied about
with ever increasing frequency. What is a loan modification? How does
it work? Do I qualify? Will my lender participate? What if my home is
worth less than the current liens? What if I am currently late on my mortgage payments?

My objective is to help homeowners who are behind or having a hard time
making their payments, facing foreclosure or notice of default to understand their workout options and whether a loan modification would be right for their situation. If they don't qualify or their lender won't participate than other workouts would need to be considered.

A typical loan modification plan may include lowering the interest rate,
adding the payments which are behind to the end of the loan - thus, increasing the payoff balance or even extending the term of the loan. This solution would generally be for a borrower whose income has changed permanently (lowered) and they do not expect it to go back up anytime soon. It would be best to show your lender that you have changed your habits and are spending less, paid down debts, etc.. to show them good financial management as they consider your request.

There are many other terms that fall under the concept of a loan workout, however, they do not modify the mortgage. Such terms you may have heard of include: foreclosure, forbearance, deed in lieu of foreclosure, NOD, Notice of Default, Cash for Keys, Short Sale, Listing home for sale, Repayment plan, Reinstatement and Bankruptcy.

A brief definition of each follows:

Foreclosure: Due to non-payment of note the trustee sells home on courthouse steps in an auction format.

Notice of Default (NOD): this notice is delivered to the borrower and states that the payments have not been paid as agreed and that if the amount owed plus certain expenses is not paid in full by a certain date that the home will be sold at auction.

Cash for Keys: The lender agrees to pay the defaulted homeowner a set amount of cash when they leave the property in good condition. Clean and undamaged.

Deed in lieu of Foreclosure: This option is where the owner gives the deed of the home back to the lender in order to avoid foreclosure proceedings.

Forbearance: The lender can "stay" the foreclosure process with a forbearance agreement between the lender and homeowner. When the homeowner faces a temporary financial hardship the lender may approve this option and allow the homeowner time to get back on their feet (so to speak) and resume payments at a later date and catch up on payments in arrears within a certain time frame. This would be used with "temporary hardship" conditions rather than a long term financial problem.

Short Sale: The lender accepts a 'short payoff' meaning that the proceeds to the lender upon the sale of the home is less than the current mortgage value. If there is a 2nd or 3rd mortgage those lenders would also have to accept a short payoff or complete write off of their loan(s).

Listing Home for Sale: Selling home on the open market usually thru a local real estate agent and using the MLS (multiple listing service).

Repayment Plan: The amount you are behind can be broken up into smaller chunks and repaid over several months with your normal mortgage payment till you are 'current' on your mortgage.

Reinstatement: Once you have paid the lender the entire amount of past due payments plus any late fees than your mortgage is reinstated.

Chapter 13 Bankruptcy: This can give a homeowner time to reorganize their debts and enter into a repayment plan that incorporates all of their monthly obligations.

A word of caution: Always seek the advice of your attorney, financial planner and accountant before proceeding with any type of loan workout or modification program of your exiting mortgage or selling your home. Don't delay when behind on payments - seek legal advise immediately and be in constant communication with your lender till your situation is resolved.

I am a Loan Modification Consultant for Las Vegas Loan Mods. We help people negotiate with their lenders to get lower payments all the time. If you have any questions about Loan Modifications please don't hesitate to contact us.

yes indeed!loan modification will help you in organizing your debts.

Hi,
I want to know about loan modification in detail and also want to know its advantages and disadvantages.

Originally Posted by Samuel

Hi,
I want to know about loan modification in detail and also want to know its advantages and disadvantages.

I would need to know more info about the scenario in order to tell you the advantages and disadvantages. Aside from just offering a loan modification we have merged with a financial consulting firm that is working as a Consumer Protection Group. I can now offer these services as well:

We have merged with a Financial Consulting Firm that is working as a Consumer Protection Group. We have several new services we can offer now on top of our Loan Modification services.

We now offer Loan Modifications AND:
-Attorney Consultations
-Look for RESPA violations and review original loan docs
-CPA Consultations
-2 year income tax review (retroactive laws etc)
-Financial Planner Consultation
-Preparation for your Personal Financial Strategy
-Grief Counselor
-One on One consultation with our Consultants
-12 week educational platform
-Network of members
-6 months Comprehensive Credit Counseling and Repair
-Debt Consolidation

The reason we offer all of these services is so that the client gets off the downward spiral they have been going through and onto the right track financial. 68% of people that get loan modifications go back into foreclosure because they either did not get a modification that was drastic enough or they only put a band-aid on the problem by modifying their mortgage, but they fail to correct the rest of their financial spending. We are here to help anyone we can.

Obviously the best way to avoid foreclosure for most California homeowners is to never fall behind on your mortgage. Unfortunately, there are many reasons for borrowers to become delinquent on their payments...

Hi All,
I have been very successful at helping homeowners and commercial property owners that are in a bind due to the weak economy. Little known programs are the best way to get these done. The Obama's "Making Home affordable" is only good for a small percentage of individuals and that is part of the problem. There are other programs that MANY people are not aware of and that you will need professional help with. I am very busy but would do my best to assist in any way I can. Just let me know.

loans modification is one of the best approach to fulfill your certain condition regarding to buy home , construction or reconstruction and renovation. it is permanent changes in one or more of the term of mortgage loans.

A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.

An amendment to an existing loan (Any kind of loan) made by a finance company or a lender in response to the long-term disability of a loan borrower to repay the full amount of loan. It typically involves a reduction in rate of interest of the loan, extending the term of the loan, other loan or any combination of the three. The money lender might be open to modifying a loan because the cost of doing so is less than the cost of default.