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Loan Modification Frequently Ask Questions
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A loan modification happens when the lender agrees to modify or restructure one or more terms of a borrower’s loan, making it more affordable for the homeowner and allowing the lender to make a non-performing loan into a performing loan. How can a Loan Mod stop foreclosure? A detailed financial analysis is performed by the Loan Mod Specialist and the borrower, to determine their best alternatives. By reviewing the lender’s loss mitigation policies and the state’s foreclosure laws, the Loan Mod specialist is able to best assist the homeowner. What is Foreclosure? Home foreclosure is a process by which a lender regains a property, which they have financed. Typically, this is because the borrower or homeowner is behind on house payments and is unable to catch up, often due to circumstances outside of his or her control. When the lender forecloses on the homeowner, the homeowner must move out of the house, therefore, losing all possession of the property and jeopardizing any possible equity that the homeowner may have in the home. There is a legal time frame, which varies from state to state, which determines how long the foreclosure process can take. How is the borrower’s tax liability affected? It is not affected by doing a loan mod. How is the borrower’s credit affected by doing a loan modification? It is not affected. How long does it take to complete the loan modification process, once the paperwork is filled out? Anywhere from 2 days to a few months. This depends on the stage of foreclosure, the state you live in, your financial position and the lending institution. Typically it takes several weeks to complete a work out agreement and stop foreclosure proceedings.
What is a Loan Modification? |
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