Loan Modification – Important Facts to Know About Restructuring Your Home Loan
The definition of a loan modification is an agreement to make a permanent adjustment to the borrowers’ mortgage in order to help stop foreclosure fast. It is also sometimes called the “restructuring of debt”. This mortgage modification typically results in a rate change as well.
There is an array of companies as well as attorneys to assist you with a loan modification. However, individual consumers can arrange for a home loan modification with a little research and preparation on their own. It is not recommended to attempt a loan modification without the proper preparation and expert advice.
In order to be eligible for a mortgage modification you must be in financial distress or hardship. Examples of financial distress or hardship are:
- Large Reduction of Income
- Loss of Job
- Critical Illness
- Divorce
- Death of a Family Member
Some knowledge of your state real estate laws, and familiarity with real estate documents is also helpful any time you attempt to tackle a loan modification.
It is important to note that many companies who claim to perform loan modifications are possible scammers who will charge a large processing fee even if the mortgage modification was not approved by the lender. On the other hand, if you are unprepared and attempt to perform your own debt restructuring you may find yourself six months down the road with no result in sight. It is best to do your research, get expert advice, and have a plan to execute in order to get the desired results.
Working directly with an attorney will cost thousands but the home loan modification may go through a lot quicker than if you do it yourself. However, if you are organized and persistent you can get the job done yourself in about a month or less. It all depends on how diligent and prepared you are.
If you decide to perform the loan modification it is very important to make note of each and every person that you contact during the process. Take note of the name, phone number, email address and mailing address of those working on your case. It may be necessary to contact them in the future if they do not give your case the priority that it deserves.
Some contacts may keep “dropping the ball” on your loan modification and you may have to push your debt restructure through using phone calls, emails, letters or visits to their office. Some or all or these may be necessary in order to complete the loan modification in a timely fashion. This is where quality expert advice will assist you in stopping the foreclosure process.
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