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What is Mortgage Loan Modification? |
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Mortgage loan modification allows homeowners and lenders to change the terms of a loan in order to help the borrower stay in the home and avoid foreclosure. It is important to note that a loan modification is not a new mortgage. A loan modification is the renegotiation of an existing loan.
With a loan modification, it's possible that a homeowner's:
- interest rate may be decreased
- interest rate can be changed from an adjustable to a fixed rate
- time the borrower has to pay the loan back can be lengthened
- loan principal may be decreased
- late fees may be waived
- second mortgage could be waived or wiped off of the books
Who might need a loan modification:
- If you have an ARM (Adjustable Rate Mortgage) that is ready or has been adjusted to a higher rate...
- If you can no longer afford your monthly payment...
- If you have high DTI or LTV...
- If you have a high interest rate loan...
- If you have been been late on your mortgage payment...
- If you have poor credit...
- If you have received a notice of default...
- If you have financial difficulty:
- Job loss
- Cut in work hours or overtime hours
- Decrease in home value
- Illness or injury
- Death of a family member
- Divorce or separation
- Personal tragedy
Every Homeowner’s situation is unique and each Lender has their own policies regarding the use of these programs to stop Forclosure.
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