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What Is A Loan Modification?
Some homeowners wish to stay in their home, but simply cannot meet the financial demands of their mortgage. In this instance, the homeowner may be eligible for what is called a, Loan Modification. A Loan Modification is essentially a legally change to the loan instrument called a, “Promissory Note”, by modification, amendment or even replacement. By providing the bank with documentation showing that you cannot afford the current mortgage payments, the bank may change the mortgage so you can afford it based on the financials you provide representing what it is you can afford to pay each month. In this instance, the bank may reduce your interest rate, reduce the principal amount loaned, or reduce your monthly payment to make it affordable for you to stay in your home.
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How Do I Qualify For A Loan Modification?
In order to qualify for this as the homeowner, you will have to participate in a very paper intensive exchange with the bank showing your economic hardship on paying the existing rate for your mortgage, and what you can pay for the mortgage based on your income. This is all negotiated with a division of the bank completely separate from the law firm that has filed the Foreclosure Proceedings against you in Court.