What is a loan modification loan?

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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.
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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 B

How do you apply for a loan modification?

Applying for a loan modification can be done professionally by a loan modification expert. Each bank has what is called a loss mitigation or loan modification department. A t

Who can do a loan modification and get paid?

Each state has different regulations on who can do a loan modification. Check with the regulatory agency in your state. Usually it is the regulatory agency for banks and fin

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 "HUD housi

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 financial ap

Will loan modification hurt?

Physically, a loan modification should not cause any damage or injury. It is simply a method that homeowners can use to negotiate with their bank for a change of the terms of

Where do you get training to be a loan modification consultant?

First, it is important to check with your state and determine if there are licensing requirements. Most states now regulate who can do loan modifications for compensation. T

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

Why does a homeowner need a loan modification?

If a homeowner suffers financial hardship. They should apply for Loan modification from lender to reduce monthly payments on there mortgage as a way to minimize financial har

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

Loan modification -fee or no fee?

Do not let anyone charge you an up front fee for a loan modification. Go see you bank and run whatever this proposal is past them.

Who can provide Loan Modification Success?

No one can guarantee that your home loan modification will be a success. It ultimately depends on your Lender as to whether or not they choose to modify your loan. However, if

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. Cons
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When you get a loan modification do they verify income?

Yes. Any time the bank modifies a mortgage it will require income verification. Yes. Any time the bank modifies a mortgage it will require income verification. Yes. Any time
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What is a modification loan?

A Loan Modification isa permanent change in one or more of the terms of a Borrower'sloan, allows the loan to be reinstated, and results in a paymentthe Borrower can afford.
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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