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loan modifications

Loan modifications

Home Loan Modification Resources

Tell us about your current home loan

What is a home loan modification?

A loan modification is a reduction of your payment by your lender. This new payment is supposed to be affordable for the homeowner and in exhange for this lower payment your bank is now saved the cost and hassle of a foreclosure sale of your home.

The payment is reduced to 31 percent of the home owner’s income to loan ratio, and so the program is therefore only really of any use to those home owners who have home loan payments that exceed 31 percent of their monthly income.

The goal of a home loan modification is to help home owners who find themselves unable to meet current home loan payment obligations by renegotiating interest rates, financing rates, deferred payments or to exit the obligation to avoid foreclosure. Read more about the requirements to qualify for a home loan modification.

Your bank has a lawyers working for them. And so should you…call for your free consultation.

What is the point of a home loan modification?

If protecting your credit score is a factor in your decision to make a home loan modification, then home owners who are delinquent on their home loan payments should note that they have already experienced an impact on their credit score, however this impact is significantly lower than the impact that a foreclosure will have. Working with a home loan modification lawyer can help home owners to maintain their property and prevent their credit score from taking any additional hits.

The specific effect of a loan modification on your credit score depends on how the bank reports the modification to the credit bureau. It is possible and advisable to request that the bank report the change to the loan as a loan adjustment, showing on your credit report as a new loan with a lower payment and no increase in the debt structure. Reporting that the modified payment agreement is current will also help to protect your credit rating during the ‘trial modification’ phase of the home loan modification.

The specific effect of a loan modification on your credit score depends on how the bank reports the modification to the credit bureau. It is possible and advisable to request that the bank report the change to the loan as a loan adjustment, showing on your credit report as a new loan with a lower payment and no increase in the debt structure. Reporting that the modified payment agreement is current will also help to protect your credit rating during the ‘trial modification’ phase of the home loan modification.

The current mandate as outlined by the Obama administration to reduce foreclosures is a solid plan, but like any new program, there is a learning curve for both the lenders and the borrowers. The party that is usually ahead of the game is a home loan modification lawyer and can often cut through any cloudiness and guide the borrower while helping the lender see the benefits of yielding to a home loan modification, and to see it as a financially positive choice.

In addition, you’ll want to have the experience of someone who renegotiates home loans for a living and knows from that experience and the experiences of previous clients what a proper new home loan should look like for someone in your particular situation. You don’t want to find out after 6 months or a year that your new home loan is still a difficult one to maintain.

Listen to the horror story that this home owner had to go through by submitting an application without knowing all the rules, regulations or options available to her.


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