A mortgage loan modification is a negotiation between you and your bank where the terms of a home mortgage are modified from the original terms agreed upon between the borrower (you) and the lender (your bank).
Benefits of a Loan Modification
Getting a loan modification is very beneficial if you want to pay your mortgage and keep your house. A home loan modification can help you: lower your interest rate, extend the term of your loan, or even reduce your principal balance. Unlike losing your home in a foreclosure auction or declaring bankruptcy, getting a loan modification is the best thing you can do for your FICO when you’re in foreclosure.
Considering a Loan Modification
People fall behind on mortgage payments for all sorts of reasons, especially since 2007 when the Subprime Mortgage Crisis began. Lenders were using faulty lending practices to originate loans – which basically means giving loans to unqualified buyers (while committing TILA Violations). Life hardships, such as: medical issues, job loss, and pay cuts are other common reasons why it would make sense for someone to start applying for a loan modification. Nobody should be stuck in an unfair mortgage. Alex Borell is an attorney who will fight to make sure lenders are held accountable for their reckless lending and push towards getting a home loan modification.