Get a Loan Modification You Can Afford

Loan modifications are a type of loss mitigation. The modification reduces your monthly payment to an amount you can afford. The components of your mortgage payment are principal, interest, property tax & insurance, and the term. Loan modifications can work in a number of ways by reducing the interest rate, extending the term, and in some cases deferring principal or making a partial claim for principal reduction. Extending the number of years you have to repay the loan spreads out the payments. In the current environment, 40 year terms and even 50 year terms are being offered. Interest rate reductions go directly to the bottom-line of what you are paying per month. For a $500,000 loan, each 1% reduction in interest saves you $5,000 per year or $417/mo. It is helpful to look at your current interest rate in comparison to what you might get if you applied for a loan today. If rates in the marketplace now are cheaper, reducing the interest on the loan may make it much more affordable. We can analyze your mortgage and come up with proposals we would like to make to the bank based on your particular situation.

If you are on the mortgage modification hamster wheel in which your Point of Contact at the Servicer is providing conflicting information, failing to review the packages you send in properly, failing to fully review your submissions or give you a decision, and either gaslights you by telling you not to worry or continues to provide vague and indefinite responses without giving you a formal decision -- you are not alone. Servicers and banks are disincentivized to grant mortgage modifications except in very specific situations.

How do you apply for a loan modification?

Each Servicer has a Request for Mortgage Assistance ("RMA") form that requires you to provide your property information and financial details. The RMA form then asks for a Hardship Affidavit. It is critical that the hardship information makes sense. The narrative is generally that you got behind on payments due to a hardship (covid-19, unemployment, reduced household income, natural disaster, serious illness or disability, divorce or legal separation, etc.). You need to explain that you are back on your feet with the ability to pay a modified loan.

We have helped hundreds of homeowners modify their loans and can guide you through the process, determine if you qualify, and make our own proposals to the bank and their lawyers to streamline the process.