A loan modification is the process where the lender agrees to change the terms of the mortgage contract in order to make it more affordable for the borrower. When a borrower is experiencing great financial hardship and having difficulty making their mortgage payments, or facing the possibility of foreclosure, it's important for them to consider the option of a loan modification.
Wondering if you would benefit from a loan modification? Contact our loan modification lawyer to get started today.
A loan modification can alter the loan's monthly:
- Interest rate
- Outstanding principal
In light of the real estate market in recent years and the economic climate, it would be reasonable to assume that the lender would be motivated to offer more favorable terms to the borrower since the borrower may be able to afford a lower payment.
Additionally, having the borrower perform on the loan would be more valuable for the lender as opposed to incurring all the costs and losses that are involved in foreclosing on a home. For this reason, you may want to explore this option.
Loan modifications can benefit the borrower in more ways than one:
- It can reduce the interest rate, change a floating rate to a fixed rate
- It can change the way a floating rate is computed
- A loan modification can reduce the principle
- It can reduce the late fees and other penalties
- It can extend the term of the loan
- It can cap the monthly payment to a percentage of the household income
- It can allow for a mortgage forbearance program
Explore Your Options in Pennsylvania
In the past, loan modifications were an option for homeowners who were in default on their loan and only available once their lender filed a motion to start the foreclosure process; however, that is not the case any longer.
These days, a borrower can commence a loan modification whether they are:
- In default of their mortgage payments
- Or if they are in foreclosure or in bankruptcy
However, the programs available will vary accordingly. If you are considering a loan modification, I urge you to contact a Philadelphia foreclosure defense lawyer, The Law Office of Michael P. Forbes, PC to find out if a loan modification is the best option for you. When you cannot keep up with your mortgage payments, it's vitally important to explore all of your available options, and I would be more than happy to do that for you!
Get started with our experienced PA loan modification attorney today by submitting an online contact form!
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