Tag Archive for Modifications

How do Loan Modifications work in Moorpark

Loan modifications are a way for borrowers to ask for a longer contract or for a lower interest rate without completing a total refinance. However, not all lenders may offer a loan modification. Loan modifications are typically given to the homeowner who is aware that they are slipping into a financial hardship but need to ask their lender how they can go about saving their home although some who might be behind on mortgage payments might still qualify. Loan modifications are not given out to all homeowners because certain criteria are typically needed.

When a lender agrees to amend or modify a mortgage loan, this is called a modification. Some ways that modifying a loan can be reached is by repaying your lender, cutting down the interest rate, a set amount of payment each month, a number of years to pay off the loan, have past due penalties forgiven, etc. Each lender may be different with their modifications. Lenders are typically open to loan modifications because they still have the ability to make money, rather than opting for a foreclosure and losing money.

Waiting for the approval or rejection of a loan modification can be somewhat of a hard process mentally but when the decision is made, the homeowner is notified. If a homeowner is denied of the loan modification, they will be told why they were rejected and it could be reasons as being behind to many times on payments or the lender may no longer hold the loan. However, if the loan modification is approved the request will be sent on to the loan servicing department and the loan will be modified. Borrowers must understand that while you wait for a decision, you must still attempt to make your mortgage payments because waiting for an answer could take more than a few mortgage payments.