You’ve got questions? Well, we’ve got all the answers!
What is a Loan Modification?
A loan modification is a mutual and voluntary agreement between you and your lender to change the terms of your loan. Loan modification allows homeowners and lenders to change the terms of a loan, like the interest rate and the monthly payment, or the terms are changed to reflect the current situation of the homeowner. This is legal and done with the approval of the lender.
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:
Monthly payment may be decreased *
Interest rate may be decreased *
Interest rate may 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 in some cases *
Late fees may be waived *
Second mortgage could be settled or possibly even wiped off of the books *
How Long Does the Loan Modification Precedure Take?
Exact time is truly dependent on a case by case basis. Because each individual has a unique financial picture and situation, each loan modification varies in time. Typically the process can take between 3 to 6 months to occur. However, during the process you remain in your home. *
Is a Loan Modification Right for Me?
If you are facing a rising adjustable interest rate, if you have fallen behind on your mortgage or foresee falling behind on your mortgage due to financial hardship, or if you are ‘upside-down’ on your loan (owing more than your home is worth), then a loan modification is probably right for you. *
I can afford my mortgage payment but I would like to reduce my monthly payment. Can you help?
One of the things that a lender is looking for in order to modify a loan is some type of economic hardship that makes it difficult for you to continue making the current monthly payment. The lender will typically modify your loan if you have a verifiable reason as to why you are now unable to continue making your monthly mortgage payments. We will present your situation to the lender in a truthful manner that best describes your current economic situation thereby increasing the possibility of obtaining a loan modification for our client. *
Will a Loan Modification Negatively Impact My Credit?
If you are delinquent on your home loan, you will receive late payments reporting to your credit, as well as accruing interest, late fees, and possibly even legal costs related to a foreclosure. If your lender agrees to modify your loan and so long as you stay current with the new loan terms, you have fulfilled your obligations to the lender and stopped any further negative credit reporting. *
Can I Qualify for a Loan Modification with a Low Credit Score?
Yes! Your credit score is much less of a factor in determining whether you qualify for a loan modification. Unlike the option of refinancing out of trouble, which requires you to apply for a new loan, loan modification simply adjusts the terms and perhaps reduces the balance of a loan you already have. In addition, a successful loan modification can actually improve your credit score over time, especially if it prevents you from ending up in foreclosure or bankruptcy. *
Is a Loan Modification like a Refinance or Debt Consolidation?
Loan Modification is not a refinance or debt consolidation as there is no credit qualification required for a modification. Typically in a refinance or debt consolidation, a borrower is borrowing money from a new lender in order to pay an old lender. A loan modification, on the other hand, is simply a renegotiation between you and your existing lender of the terms of your existing loan. It is the same loan, just modified to make it more affordable to you. During a loan modification, you will not be borrowing additional money or transferring title to another individual or entity as in some of the scams that are commonly reported in the news. *
Can I Qualify if I've Received a Foreclosure Notice?
Yes! As long as you still reside in the home – that is, you didn’t voluntarily abandon it, and the home hasn’t been sold at a foreclosure auction – you may still have time to work out a loan modification with your lender. The sooner you take action, the more options you have available and the more time you have to pursue the best option, but you can still negotiate late into the process. By contacting the lender or, better yet, having an attorney contact the lender on your behalf, you demonstrate a good faith effort to work out a solution and can often buy yourself extra time to negotiate a loan modification. *
How can Bankruptcy Bulldogs stop Foreclosure?
Bankruptcy Bulldogs specializes in finding loan modification resolutions on behalf of homeowners. We work closely with mortgage lenders and prevention service providers to hopefully modify the terms of your current mortgage so that you can afford them; preventing foreclosure which is bad for you and the lender. We can also go to court with foreclosure defenses and file bankruptcy should it fit your situation. *
Does Everyone Qualify for a Loan Modification?
Not everyone may qualify for a loan modification. Often, this is the case when you have waited too long to act and take charge of your situation. However, if a loan modification is not an option for you; our real estate experts will explore every possible avenue to save your home and your credit. *