How Can A Home Loan Modification Help Avoid Foreclosure?

by | Oct 8, 2014 | Lawyers

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When a consumer is facing financial hardship he or she may be eligible for a home loan modification in Lake Worth. A home loan modification basically is a restructuring of the current mortgage, to qualify for this the mortgagor must be able to prove to the mortgagee that the new outstanding balance after modification is something that can be met without any difficulty. The lender will verify this through a credit check, a thorough review of the salary or income, a current valuation of the property and an analysis of all the mortgagors’ debt. If all the criteria are met, the home loan modification in Lake Worth can proceed.

The main consideration in a home loan modification is hardship of some kind. It could be that the homeowner has been disabled, has a serious illness or is suffering through the death of a close family member. Those members of the US military that are stationed overseas will also be seen as suffering a hardship. If you payment history shows that you have constantly struggled to repay your loan it may not qualify if the problem is brought on by an increase in the interest rates. In short, the lender must be able to ascertain that there is some decisive factor that is behind the fact that payments are being missed.

It is crucial that the debtor has the ability to repay the restructured loan. If the mortgagor cannot show that he or she has a permanent solution to the problem the lender will not even give a thought to a restructuring. The borrower must be able to qualify for a mortgage under the new terms the same as if they were a first time borrower. If, during the credit investigation the mortgagor is found to be burdened with excessive credit card debt, etc this may lead to disqualification. A thorough credit check is made along with an income evaluation prior to submission of the proposed modification.

Any home loan modification in Lake Worth must be done through the same lender that holds the current property loan. Attempting to involve a third party to expedite the process will not work. In many areas home loan modifications are guaranteed by the government, if the borrower qualifies for the modification the lender will prove to be very eager to complete the process as the next step is either bankruptcy or foreclosure, neither of which are good options for either party.

A home loan modification in Fort Worth is an acceptable way to keep your home and your credit rating. If you are having difficulties maintaining your mortgage payments you are invited to discuss it with the Law Offices of Sean I. Koplow.

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