Loan Modifications and more
A loan has terms based on interest, monthly payment installments, and the number of months that a person may repay it. Sometimes because of a changed interest rate (if it was flexible) or an applicant’s change of income status, there may need to be loan modifications made to the terms. Loan modifications can change the interest rate or repayment terms, but it must be done with the lender’s approval.
Hardships often come into our lives. When we apply for a loan, we often have the best interest at heart and have already reviewed our budget. During that time, the applicant may have had a steady job and was in good health. There are side-steps in life that can often derail our plans, and we have to make changes.
Should a hardship happen in your life and you are having trouble repaying a loan, you need to contact the lender. There may have been a medical emergency or even an unexpected lay-off due to economic changes. If you have been on positive terms with your lender and haven’t had any late payments on your loan, you could ask for loan modifications. You may be able to ask for a default, forbearance, extend the amount of time to repay the loan, or possibly lower the interest rate.
Loan modifications are also helpful with families who are having trouble paying on their homes. A once affordable mortgage may be causing trouble after some time has passed because of a change of income. Loan modifications can make it easier for families to pay their monthly mortgages. Instead of what was once a 15-year repayment term-it could be changed to a 20-30 year repayment term. The lender could see about changing the current interest rate as well.
To show proof of hardship or reasons why you would like to change the terms of your loan, you should bring in copies of your latest pay-stubs or a letter from your employer. Or if you do not have the same job anymore, you can bring in proof of your unemployment such as unemployment pay-stubs or a letter showing the loss or lay-off of your job. If you are dealing with unexpected medical bills, you can bring in your medical expenses to show proof of those too.
Everyone come across hardships in their life at some point. Do not stop making payments because you are unable to make them. Before the due date of your next payment, contact your lender for an appointment. Be honest and upfront with them. It makes the situation worse if you avoid a financial problem. Sometimes making loan modifications can help ease the blow of financial hardship and make your money problems less stressful to handle.
More information about Loan Modifications
Fannie Mae Freddie Mac to offer streamlined loan modifications Los Angeles Times Fortune. Fannie Mae Freddie Mac to offer streamlined loan modifications. Los Angeles Times. In a push to simplify loan modifications many borrowers who become 90 days or more past due on mortgages backed by Freddie Mac and Fannie Mae will be offered lowered payments without having to prove hardship the federal regulator of the Fannie Freddie to Ease Loan-Modification RulesWall Street Journal. Fannie Mae Freddie Mac allow no-doc loan modificationsWashington Business Journal. FHFA’s Loan Modifications May Repair Agency ReputationLaw360 subscription Bloomberg Housing Wire Reuters. all 80 news articles.…
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