How to Complete a Loan Modification

If you’re one of the many homeowners who are struggling to pay your mortgage loan, there are two words that may save you a lot of stress in the present and in the future: Loan Modification.

When initiating a loan modification, it is important to remember that this is beneficial to both the lender and the borrower.  Whether you call it a loan modification, mortgage modification or reduction, or a workout plan—it is all the same thing.  When a borrower is having trouble making mortgage payments, both the lender and the borrower suffer.
Simply put—a loan modification is a reworking of your home loan.  By adjusting the interest rate, loan duration, and/or other negotiable factors, lenders can make it more affordable for you to pay on a monthly basis.

Terms and conditions vary depending on the situation, the borrower, the lender, and the mortgage rate.  However, if you’re considering initiating a loan modification, there are some things you should know before you approach your lender:

1. Whether or not to get professional assistance. If you’re a savvy negotiator and a patient person, you may be able to handle your own modification. However if you don’t know much about finance, lending, negotiating, or if you lack extreme patience—you may want to consider hiring an attorney.

2. Know your lender. If you’re lender is a bank, you will probably have more flexibility.  However if your loan is a mortgage-backed security—you will need multiple approvals before your loan modification can be approved (unlike a bank where there is no middleman).

3. Be forthcoming and truthful. Sure, getting into a mess like this is embarrassing. But you can save yourself even more embarrassment by having your statement in writing and you should be able to explain how you plan to fix this so that you can stay on track with future payments.

4. Keep it simple. Your lender doesn’t want your entire life story.  But they do need the hard facts.  I.E.: Who, What, When, Where, Why, How.  And they will need to hear about your future financial plans so that they can put their faith in you.

Bottom Line:  You’re not alone. Millions of homeowners can and do benefit from loan modifications.

If you would like to discuss the possibility of initiating a loan modification in Palm Beach or Broward county, feel free to call our office for a confidential discussion.

The Law Office of Donna Hearne-Gousse

(561) 582-5670

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