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There are quite a few benefits of hiring a lawyer to assist in the loan modification process. These benefits apply across the board to all loan types, regardless of the collateral at stake. For example, an attorney can assist a loan modification candidate in beginning the modification process, completing required paperwork and moving toward an improved state of financial well-being.
What Are Loan Modifications
Loan modifications are often sought by those who are drowning in debt burden and falling behind in making regular monthly payments or payments at other intervals. These loan customers simply need a little help and a leg up in the process. A loan modification represents an opportunity to make an alteration to the existing loan’s payment structure. You can learn with frequently asked questions.
How Does A Loan Modification Begin
To start the loan modification process, a candidate should compile his or her financial paperwork, documents and account materials. It is best to err on the side of over-inclusion in what is included. This pile of documents should be brought to the initial consultation with a loan modification lawyer. The lawyer will then have an opportunity to review and ask questions about those documents.
Many lenders require submission of a hardship letter to begin the formal process. The purpose of the hardship letter is to provide an explanation of assets and liabilities of the household, or income and expenses. The letter also explains why the borrower has had some sort of recent change in circumstances or condition financially, making it necessary to alter the loan's structure.
The hardship letter further addresses why the borrower believes that he or she cannot repay the loan at its current rate or other terms and could only do so under the modified terms proposed. A loan modification attorney is able to review a client's financial picture, prepare a proposal to the lender for modified terms of the loan and frame that proposal so that both parties are likely to benefit from same and see advantages to entering into a modified loan agreement.
What Is The End Result
The end result of this process is often a refinancing of the loan in question, or at least a modification so that payments are more flexible to and accommodating of the borrower. The lender’s goal is to keep getting paid under the loan agreement until full repayment is made. So long as reasonable payments continue without lapse and with industriousness, diligence and earnestness on the part of the borrower, the process has a viable shot at obtaining approval from the bank.
- What Information Will I Have to Provide to My Lender When Applying for a Loan Modification?
- Will A Mortgage Forbearance Agreement Stop A Pending Foreclosure On My Home
- Loan Modification: Understanding Eligibility Requirements
- What Qualifies as a Hardship for Purposes of a Mortgage Modification?
- Refinancing After A Loan Modification