What is Loan Modification & Who Qualifies for it?
What is a loan modification?
Whether you call it a loan modification, mortgage modification, restructuring, or workout plan, it’s when a borrower — who is facing great financial hardship and is having difficulty making their mortgage payments — works with their lender to change the terms of their mortgage loan. The workout plan could result in temporary or permanent changes to the mortgage rate, term and monthly payment of the loan. The plan’s goal is to help the borrower reduce their monthly mortgage payments to 31% of their gross income.
What is not the Loan Modification?
Well, Foreclosure, Refinance & Bankruptcy are not the loan modification. In fact, these are the last options while the loan modification is something which is the better option than these last options.
Who is Eligible for a Loan Modification?
Well, anyone who suffers from a hardship are qualified for the loan modification. Hardship means any one or more of the following.
- Job Loss
- Income Reduction
- Medical Illness
- And many others…
If you are suffering from a hardship than you can qualify for the loan modification.
Why would lenders modify your loan?
Incentives. According to USA Today, the plan also includes incentives to encourage mortgage servicers — who collect fees for refinanced and delinquent mortgages — to work with qualified borrowers to modify loans. Servicers will get $1,000 for each eligible modification they make, and another $1,000 a year for three years as long as the homeowner remains current on payments.
How to Get Approved for the Loan Modification?
Well, there are several ways to get approved for the loan modification process. Here are the few such ways.
- Do it Yourself
- Government Help Programs
- Loan Modification Agent
- Loan Modification Firm
However, the best way to do the loan modification is do it yourself. Simply Download 60-Minute Loan Modification Workbook by Mike Rockwood and learn the whole the process of loan modification in detail. Download this step by step guide will guide you through the every single step of the loan modification. You won’t require any other Information for the loan modification once you download this book.
According to me, The Best way to do a loan modification is – Do it Yourself.