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Do you need representation for a loan modification?

On Behalf of | Sep 18, 2020 | Residential Real Estate |

If you’re trying to defend yourself against a foreclosure, one think you may want to look into is a loan modification. A loan modification varies from lender to lender, so it’s important to have an attorney on your side who is familiar with the process your lender uses.

Using a loan modification can help you refinance your mortgage at a rate that you can afford. Refinancing completely replaces your loan, so you have a new mortgage. It may have a lower interest rate and lower monthly payments.

Who decides on the terms of a loan modification?

The terms of a loan modification are determined by the lender. However, your attorney can take part in the negotiations and work with the lender to come up with a solution that works for you. Some options may include:

  • Changing from an adjustable-rate mortgage to a fixed-rate loan
  • Extending the length of your loan term
  • Lowering your interest rate to create a more affordable payment

Why would lenders modify a loan rather than pursuing foreclosure?

Lenders will often allow a modification of loans instead of pursuing a foreclosure, because the foreclosure process is costly for lenders. Foreclosures take time and require court involvement, but a loan modification can be done in house. That means that the company will be more likely to save money. In the long-term, they’ll get more money by making your payments affordable rather than relying on the sale of a foreclosed property, too.

If you need a loan modification and representation, your attorney can help. Our website has more information for you, so you can learn about this option.