LOAN MODIFICATION

 Most lenders will consider a request from a borrower who is in financial disress to modify the loan to enable that person or persons to keep current on their payments.  There are various options available to lower the payment.  They include lowering the interest rate on the loan, extending the loan payoff term (amortization), or possible repayment forebearance (delaying the payback on all or a portion of the loan) to allow the borrower to get through a temporary "financial crisis" such as sickness, loss of job, etc.

Generally the lender will look at the reason for the financial difficulty and possible duration of it.  The objective  would be to lower the monthly payments to a level that is "affordable" given the borrowers current  income.  The lender will only do this if the borrower's hardship warrants consideration (you have a valid hardship) and there is reasonable assurance that you will be able to keep your payments current after teh modification. 

The federal government's Making Home Affordable program that has been instituted to help people in financial distress, has served to "streamline" the loan modifiction process and give lenders and borrowers cash incentives to modify loans or , if that is not feasible, to sell the home to avoid foreclosure.  The HAMP and HAFA programs discussed on other pages of this website are the newest programs available for loan modification or "SHORT SALE" or "DEED IN LIEU" of foreclosure to keep people from losing their home to foreclosure. (click on any of these links for an explanation of them).