WHAT IS A LOAN MODIFICATION?

Due to the difficulties in the housing market and economy being in a recession, the term Loan Modification has been getting a lot of attention lately and rightfully so.  

With millions of homeowners stuck in toxic adjustable rate mortgages and no ways to refinance out of them, loan modifications may be the only way to assist struggling borrowers. This term is used when your lender modifies your current mortgage (same loan you have, only changes are made to the note) in order to work with you and make your mortgage more affordable. A modification to your rate, balance of loan, delinquent fees owed, term of loan etc. can be made by the Lender. In the past this was only used when a borrower was delinquent but now we will see it being used before someone is delinquent. This will be the hottest term and the best way to help people avoid foreclosure.

A Loan Modification will change the existing mortgage note and give the client a fresh new start in managing their home. Accounts will be brought up to date immediately. 

With a loan "modification" you take the mortgage you now have and change the interest rate and payment requirements in order to achieve a fixed rate. A change in rates and payments does not result in the need for a new closing, legal fees, survey, appraisal, or taxes. In contrast, if you "refinance" a loan you'll be required to have a closing and forced to pay a variety of fees and taxes, but with a loan modification it will just be a change in rates and terms.

Lenders are willing to negotiate when borrowers are facing financial difficulties and can't obtain other financing alternatives. Home Relief Assistance shows the lender why it would be in the lender's best interest to agree to a workout arrangement. In turn, the lender will reduce the loan interest rate, reduce monthly payment amounts or change other loan terms to allow for an affordable loan to allow the homeowners to avoid foreclosure.

Home Relief Assistance brings the two parties of problem loan together to mutually agree to a workout that creates new and better loan terms which are affordable and realistic. The hope is that the new loan will enable to the borrower to meet their obligations. And with Home Relief Assistance's detailed personalized financial analysis, this hope becomes a reality. Our clients accept the loan that is affordable to them, and never need worry about foreclosure again.
 

Restructuring - This is the most popular loan modification, where we will work with your lender to prove your financial hardship, which could result in: a decrease of the mortgage balance and/or a reduction of the interest rate and/or the past due payment being put on the back of the loan.  Reinstatement - Pay your lender(s) all of your past due payments to bring your mortgage current. This option is rarely feasible. 

Refinance - We have established relationships with very reputable lenders who can give loans on mortgages that are in foreclosure if there is enough equity in your property available. 

Sell Your Home - You may simply sell your home before the Foreclosure Sale Date. Sometimes the home owner is unable to sell the home outright at the desired sale price and this is not an option.

Short Sale - We may be able to negotiate a Short Sale on your behalf with your lender(s). In this instance the lender may take less than what you owe on the loan to avoid a lengthy and costly foreclosure process.

Deed-in-lieu of Foreclosure - We can arrange for you to simply give the home back to the lender and walk away with a clean slate.

Bankruptcy - This is a last resort, and if necessary our attorneys can handle this for you. This will only save your home temporarily. If you miss one payment during this process the lender will put you right back into foreclosure. 

Foreclosure - You may elect to allow the home to be entered into mortgage foreclosure. This is the most damaging to you. The lender will take your home and all of your equity. If there is no equity, your lender may get a deficiency judgment against you and come after you to repay the shortage or “deficiency”. This is the most damaging to your credit and your ability to acquire another home loan. 

Time is the most critical factor here. With every day that passes, our options become limited or more complex. Every day makes a difference. Don't hesitate another minute!

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