A loan modification could do the following:

• Lower interest rates
• Stop foreclosure
• Reduce principal balance (short refinance)
• Catch up on delinquent payments
• Turn your adjustable loan into a fixed loan

Loan Modification Guidelines

Loan Modification guidelines could differ from lender to lender. The most common factors are the following:

• Have a provable hardship
• Have an adjustable rate mortgage
• Have high debt to income ratio
• Have a Negative Amortization Loan
• Can prove sustainable income to justify the modified mortgage
• Are unable to refinance

Approval Factors

The most important factor is to prove that you have the ability to satisfy your new mortgage payments based on a loan modification. Banks are careful in analyzing debt-to-income ratio in order to determine modified rates and terms. In many cases, a complex preliminary analysis allows the lender to identify the steps and measures that are required to achieve a loan modification.

Behind on mortgage payments?

You can still qualify for a loan modification if you are behind on your mortgage payments. In some cases it is easier to qualify if you are behind. If your bank or lender feels that modifying your loan will keep you in your home and save them from a costly foreclosure, it makes more sense to modify. When our negotiators prove to your bank that you can afford a modified payment, they are likely to modify your loan.

Short Refinance

Short Refinance (Short Refi) is a next option to loan modification. It is a transaction, where the current lender agrees to accept less than the full amount owed on your property. It resulted in reduction of principal on a loan.