If I am late on repayments, can I get loan modification?

Loan modification involves changing the terms of a mortgage loan to reduce the monthly payments, in order to help the borrower to stop foreclosure. Mortgage loan modification often involves reducing the interest rate, increasing the term of the mortgage, changing the type of loan, or all three. 

 

Lenders are more likely to approve your application for modification of loan if you have a regular income and they feel that you will be able to afford the reduced monthly payments.

 

If you are facing financial difficulties and are not being able to keep up with your monthly payments, you need to inform your lender immediately.

 

Some lenders may not be willing to discuss loan modifications unless you have missed out on a payment. However, if you experience a major financial setback like an illness or job loss, it is best to discuss your problems with your banker promptly, even if you have not missed out on a loan payment.

 

The sooner you act, the better your chances of working out a loan modification arrangement with your lender will be. 

 

Don’t avoid opening mail or taking calls from your lender. The first letters you get from your lender may offer solutions that can help you to avoid foreclosure.Subsequent letters may inform you about legal action.

 

If you are not being able to make the monthly payments, check your loan documents to find out about the action your lender may take if you miss a payment. In general, a bank may initiate foreclosure proceedings 3 to 6 months after you miss the first monthly payment.

 

You can contact your State Government Housing Office find out about the applicable laws and timeframes. Contact a HUD-approved home counselor to find out about your options. An advisor can also help you to organize your finances and can represent you in negotiations with your lender, if required. 

 

You can find a HUD-approved housing counselor in your area by visiting the website of the HUD (U.S. Department of Housing and Urban Development).

 

Be careful about dealing with loan modification companies that offer to help you negotiate with your lender. Check the credentials and reputation of the loan modification services before you decide to use them.

 

Assess your home loan modification options carefully and don’t sign any documents you haven’t read or don’t understand. Get the advice of a trusted real estate professional, attorney, or a HUD-approved housing counselor before you sign any papers.   

 

 

More Stop Foreclosure Tips:

1. Avoid Foreclosure! Loan Modification Can Be Your Solution!
2. How much time do I have to halt foreclosure?
3. Acquire foreclosure help Before It’s Too Late