What would you like to do?

What is a loan modification loan?

already exists.

Would you like to merge this question into it?

already exists as an alternate of this question.

Would you like to make it the primary and merge this question into it?

exists and is an alternate of .

A loan modification isn't a loan. It's not termed a "loan modification loan" -- it's just called a "loan modification."

It works by allowing homeowners and their lenders to negotiate to change the terms of a mortgage, usually to make the payments lower and more affordable to help the borrowers avoid losing the house to foreclosure.

There are a number of ways that borrowers and banks can negotiate for different terms. This list is not exhaustive:

  • Lower the interest rate.
  • Change an adjustable rate mortgage that may increase in a number of months to a fixed rate mortgage with more stable payments.
  • Decrease the amount owed on the principal balance of the loan.
  • Take any missed payments and, instead of requiring they be paid now, add them to the back end of the loan.
  • Extend the term of a loan from 15 years to 30 years, or from 30 years to 40 years in order to lower the monthly payment.

The original mortgage is not replaced with a new one as in a refinance, but changes are made to the functioning of the current loan.

In some cases the loan modification can provide for an increase in the amount of money borrowed.
26 people found this useful
Thanks for the feedback!

Can you get a loan modification on your car?

Car loan modification is one such option to avoid repossession of  your car. So what happens here.... the service provider(loan  modifier) studies your loan history and they

Can you sublet your condo after a home loan modification?

You can find your answer by contacting your loan modification holder, to verify that renting or leasing your unit is allowed under the terms of your loan modification. Then,

How does a loan modification impact the original loan?

The purpose of the loan modification is to renegotiate the terms of the original mortgage agreement. The objective is to ensure that your monthly payment is affordable. Conseq

Who qualifies for a loan modification?

This is really a case by case basis. It depends on the tyoe of loan, the personal situation and desired outcome.    There are basically 2 paths to modification- the fin

Can you sell your home after you have got a loan modification?

Absolutely! A home loan modification is designed to do 2 things. 1. Make the payment affordable for the homeowner. 2. Keep the bank from foreclosing on the house. The ba

What does a step loan mean in a loan modification?

A "step-rate" modification states that you will have a changing interest rate. For example, the first 5 years, your interest rate will be 2%, the 6th year will be at 3% and be

What is the best way to get a loan modification?

The safest way to get a loan modification is to contact a counselor with a HUD approved counseling agency.    To find a HUD approved counselor in your area search for "

What is the purpose of a loan modification?

A Loan Modification is a process where the terms of a mortgage are modified outside the original terms of the contract agreed to by the lender and borrower. This could result

What is Step rate loan modification?

A step rate modification involves a low beginning rate for the  first one to three years. After this the rate will increase by one  percent every twelve month until it caps

How many times does loan modification can be done?

Depending on how permanent your last loan modification is. If you got a very low rate that is fixed for 30 years, more than likely you will not be able to get another modifica

When will you get your loan modification?

The time it takes to finalize a loan modification depends on a number of issues. The first is how long it takes the homeowners to get back on their feet financially and be a

Can you do a loan modification if you are in chapter 13?

A Chapter 13 bankruptcy puts the entire debt collection process on hold to give the filers time to work out a court-approved repayment plan for a portion of their debts. Thu

How do you enroll on a Loan Modification Program?

RestReport.com helps home owners show proof to their mortgage bank or servicer that they are eligible for a loan modification or short sale program. Home Owners need this repo

What is loan modification?

A loan modification is an adjustment to the original terms agreed upon by the borrower and the lender. The objective of a mortgage loan modification is to ensure that the Bo

Who can do loan modification in Alabama?

Generally, you will need to contact your lender directly.    You can get free help by contacting a HUD housing counselor. There is no charge for this help. Both the age

How do you get loan modification?

You have to apply to your lender for a loan modification. Some people use attorneys to make application on their behalf, and others choose to go the "do it yourself mortgage m