What is loan modification?

A Loan Modification is a change in one or more of the terms of your loan creating a brand new contract between you and your lender. We will work with the lender to create a new contract that will reinstate your loan and give you a fresh start.

Ways your loan can be modified

What terms a lender will agree to largely depends on your ability to pay and what would make the most economical sense for both parties.

• Adding the delinquent balance to the loan. Rather than require payment up front, the lender may choose to add the balance owed to the new loan terms ensuring you will eventually pay it back.
• Reduce the interest rate. You’ll need to prove that a rate reduction can positively affect your situation and allow you to resume making timely payments.
• Extending the years due. By adding years to the loan, the lender is able to reduce the monthly payment knowing that they will recover the amount later on.
• Reduce the balance owed. Under some circumstances, the lender may elect to reduce the balance of the loan. To do so, they’ll want to be absolutely sure you will be able to make the new payments.
• Convert an ARM (adjustable rate mortgage) to a fixed rate.
• Extending the time that your ARM rate will change.

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