What does a mortgage loan modification do?
The modification is a type of loss mitigation. The modification can reduce your monthly payment to an amount you can afford. Modifications may involve extending the number of years you have to repay the loan, reducing your interest rate, and/or forbearing or reducing your principal balance.
Is a loan modification a foreclosure?
A mortgage loan modification is one of the most common types of loss mitigation, the term for techniques to prevent a foreclosure. The modification changes the original terms of the promissory note to reduce the amount of the monthly payments, usually while lengthening the term of the mortgage to compensate.
Who can do loan modifications?
1. California licensed real estate brokers can perform loan modification work, and licensed real estate salespersons can do such work under the supervision of their employing broker.
How can I get a mortgage modification?
To get a modification, you’ll need to submit an application to your servicer. Often you’ll need to provide: a completed application (including your personal information, mortgage information, property information, and so forth) recent pay stubs (or a profit and loss statement if self-employed)
Can I refinance after modification?
Positive changes that can help you obtain a refinance after a modification include increased property values. With substantial equity, a refinance lender bears less risk because it finances a proportionately lower amount relative to property value.
Can I modify my mortgage?
Reduce the Interest Rate. Shaving your interest rate can reduce your monthly mortgage payments by hundreds of dollars.
What is loan modification mean?
Loan Modification Definition. Loan Modification includes changes to an existing loan agreement. Modifications are made by the lender if the borrower is not able to repay the loan.