Loan Modification

Overview

Loan modification is rapidly gaining more recognition by the finance industry and the federal government as a viable alternative to foreclosure and, in many cases, it may be the only lifeline available to save a person’s home. If executed properly, both borrowers and lenders can largely benefit from this process most especially in times of financial crises.

Simply put, a mortgage loan modification is a form of debt management that involves a permanent revision of one or more terms concerning a homeowner’s mortgage. This often results in a payment plan that the homeowner can afford. Modified mortgages may extend the terms of the loan, may bring your original interest rate to a lower fixed rate, and may add any of your outstanding balance to the end of the loan. In effect, the reinstatement of your loan and its modified mortgage terms may avoid and eliminate foreclosure proceedings.

Contrary to common perception, loan modification programs are not the same as refinancing, debt consolidation, or forbearance.

As a Solution to Foreclosure

Even though banks have been known to routinely foreclose and sell properties to other buyers for a portion of the property’s original worth, the housing industry slowdown has made them realize that this is no longer a practical option. The current economic situation has made it more difficult for lenders to unload these properties and recover any additional funds from the previous homeowners.

Creditors have found themselves in favor of working with our firm in order to negotiate reasonable home loan modifications for consumers. Costs, fees and past due escrow accounts that are rolled into one modification has potential to distance the borrower from further anxiety since payments are stretched over a long period of time.

Most loan modification cases require a team of consumer advocate professionals to use the legal avenues available to expedite the process. Through this process, the Debt Reduction Law Center may help homeowners save their homes while reducing their loan terms to the maximum their lenders will allow. Get in touch with our legal specialists to know more about loan modification requirements.