What is a Loan Modification?

If your family is behind on mortgage payments, you may need a loan modification. Loan modifications are a means for you to work with your lender to better match your mortgage payments with your financial situation. The primary fear of homeowners is a foreclosure on their house. Where will you live? How will your lifestyle change? Will you have to move? Fortunately, there may be something you can do to sleep soundly at night once again. If you believe it is time to apply for a loan modification, here are some of the questions you may have:

Do I qualify for a loan modification?

Currently, every foreclosure lawsuit that affects a residential property must be assigned to the Foreclosure Settlement Conference Part before a bank can proceed with the foreclosure and sale. During this settlement process, you may apply for a loan modification and require the bank to review your financial ability to determine whether you qualify for one of the government loan modification programs or a bank’s internal loan modification. Some of the documents you will have to provide to the bank are as follows:

  • A current utility bill proving you reside in your home
  • Personal or business bank statements
  • Paystubs from each wage earner in your family
  • Financial statements or profit & loss statements
  • Personal or business tax returns
  • A hardship letter to explain why you cannot currently pay your mortgage

How can a loan modification help me?

A successful government loan modification will lower your interest rate to 2%, extend your loan term to 40 years, and allow for lower monthly payments. Some of the banks’ internal programs may lower your interest rate, forgive excess principal, fix an adjustable rate, or place your defaulted payments at the end of the loan, to be paid when you sell the house or refinance. Ultimately, a loan modification may be just what you need to get back on track towards financial stability. If you think you are ready to request a loan modification, please do not hesitate to contact our experienced bankruptcy firm.

Contact our experienced New York firm

The thought of bankruptcy can be scary. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq.today to schedule a consultation and discuss your options. We will have your back every step of the way.