If you find yourself at risk of foreclosure you are probably familiar with the term Loan Modification. But what exactly does it mean? What is involved? And what about those companies that offer to negotiate the loan modification with your lender on your behalf but charge upfront fees? Here is an overview of what a loan modification is, how it works and why you DO NOT have to pay someone else to do it for you.
What is a loan modification? A loan modification is simply changing your existing loan agreement. The goal of a loan modification is to restructure your mortgage and lower your payments in an effort to avoid foreclosure. Overall, loan modifications can be less expensive for the lender and can allow you to keep your home.
How do they work? The first step is to contact your lender. Explain your situation honestly and discuss with them why you cannot afford your current payments. Lenders all have different criteria for loan modifications. To find out how your particular lender works, you just have to ask.
What about companies that offer to do it all for me? While there are reputable, legitimate companies who can negotiate a loan modification on your behalf, there appear to be more “bad apples” than good. Some tell-tale signs to look for are:
=> They charge a huge upfront fee
=> You do not get a detailed explanation of the process prior to paying your fee
=> Seems to good to be true (it usually is)
=> Does not have an application process to see if you qualify for a loan modification; accepts anyone
=> Cannot be found on the Better Business Bureau or anywhere else in your state
The bottom line is that most people can handle a loan modification themselves. If you believe a loan modification may be right for you or you simply want to learn more, fill out the form below and we will send you our Step-by-Step Guide to Your Loan Modification.
