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When Should I Consider Modifying My Mortgage?

Many people who have fallen behind on their mortgage payments may ask themselves, "Should I modify my mortgage?"  Try considering several factors to decide whether loan modification is right for your situation.

First, understand that a loan modification is a new agreement with your mortgage provider that alters the original terms of your mortgage loan. The application process has similar requirements to qualify as other types of loans. You must provide documentation concerning your personal and financial affairs, proof of income, employment records, tax statements, etc.

How will a loan modification help me?

A loan modification can be temporary or permanent, and can offer homeowners assistance by:

  • Lowering monthly payments
  • Offering a lower  mortgage interest rate
  • Eliminating  fees
  • Increasing the time span for mortgage repayment

When is a loan modification unlikely to help?

A loan modification may not be a good solution if you have high consumer debts, such as credit card and medical bills.  Loan modification only lowers the interest rates on your mortgage, not on your other debts — if you can't pay your mortgage, it may be because you are overwhelmed with high consumer debt.  Furthermore, a loan modification will not stop foreclosure proceedings. Homeowners may, however, stall foreclosure by obtaining a loan modification.

Don't wait to hire a lawyer

Many people have had the unfortunate experience of losing their homes to foreclosure while their loan modification application was still pending. Therefore, you must act quickly if you receive a notice of foreclosure. In addition, be aware of the many frauds that claim to provide mortgage assistance or assistance in negotiating a mortgage loan.  Do not engage a company or individual that requires that you pay fees upfront for modification or counseling services on a delinquent loan.  Services like these usually don't deliver and push you into further debt.

Instead, get competent legal assistance from an experienced bankruptcy attorney to help you navigate the loan modification application process to direct you toward other solutions to stop foreclosure on your home.  An experienced attorney from DebtStoppers, Bankruptcy Law Firm Robert J. Semrad & Assoc., LLC can aggressively protect your rights and negotiate loan modification terms that best suit your needs.

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