Loan modification faq
What is the purpose of a loan modification?
The main goal of a loan modification is to allow the homeowner to lower his or her monthly payments to make them more affordable for a short period of time.
Who wins in a successfuly loan modification?
Everyone, really. The homeowner obviously wins because they save their home from foreclosure and are able to only have to pay a fraction of their previous monthly mortgage payments until they get back on their feet.
The loan modification attorney/ company wins because they get a small share of the value of the mortgage in fees, usually about one or two percent.
The bank wins because they do not have to foreclose on the home. As I’m sure you know, foreclosed homes are a tough sell and usually only end up selling at pennies on the dollar at what they are actually worth. Banks will usually do everything they can do avoid foreclosures.
How long do loan modifications take? From start to finish, you are probably looking at a maximum of 2 months, which is reasonable.