What is meant by a loan modification or a mortgage modification?

It is a fact that no lenders would want to allow the foreclosure and hence the sheriff sale.Instead they would want to have a talk with you and give you another solution.Infact the borrowers need to ask the lenders if they could be given a loan modification.normally the lenders are not going to give the mortgage modification voluntarily.Having a good communication with the lenders is very vital – some people forget this.

Loan modification means that the terms of the loans are going to get modified – either there would be a reduction in the interest rate or there would be a change in the term [loan would be extended to a longer period].Thus you would see lower affordable monthly payments.

But why would the lenders give loan modifications?

The lenders want to give you loan modifications because of the following reasons:

=>If you file for the bankruptcy ,the lenders are going to experience huge losses,

=>foreclosure proceedings will need the lenders to spend a lot of cash for the court and the lawyer – this can be avoided by giving an alternative solution.

Are there any requirements for the loan modifications?

The requirements will only depend on the lender.Whether you receive a modified mortgage or not would depend on the financial situation.If the lender is not satisfied with all your documentation and the hardship letter,you are not going to get the modified mortgage loans.You need to convince the lender that loan modification is the only way to save your home from the foreclosure.Lenders want genuine reasons to give you a modified mortgage.