LOAN MODIFICATION

Q: Are there alternatives to a Foreclosure, Deed in Lieu, or a Short Sale?

A: Yes- you may qualify for a Repayment Plan, Loan Forbearance, or Loan Modification

Repayment plan: The lender allows you to “catch up” on past-due amounts, temporarily increasing your monthly payment by adding part of the overdue amount to your regular payments for a set period. The length of a repayment plan varies depending on the past-due amount and how much you can afford to pay each month, among other things.  

Forbearance agreement: Your lender(s) agree to temporarily reduce or suspend your payments, giving you time to recover from a short-term financial setback. This may be an option if experiencing a temporary hardship, are behind on, or on the verge of missing payments. Terms and conditions will vary from lender to lender.

Loan modification: The lender permanently adjusts the loan terms to reduce your monthly payments and typically brings the loan up to date by adding any past-due amounts to the debt balance. Under the terms of a loan modification, the lender might agree to do one or more of the following to lower your monthly mortgage payment, such as reduce the interest rate, convert a variable interest rate to a fixed interest rate, or extend the term of the loan. 

All of these options may require one or more of the following actions from a borrower:

Complete an application documents, include financial statements, proof of income, recent tax returns, and bank statements

A hardship letter for the lender(s) to evaluate your situation. 

Proof as to why you can’t make your current mortgage payment due to a financial hardship but the ability to cover a modified payment.

A borrower may ask the borrower to complete a trial period and demonstrate that the new monthly amount is manageable and the plan is viable. 

In all cases, AVOID “Foreclosure Rescue” Scams

Scammers often prey on distressed homeowners by making unrealistic guarantees, such as promising to stop the foreclosure process immediately or claiming a 90% success rate for getting homeowners approved for loan modifications. If avoiding foreclosure watch out for foreclosure “rescue” companies that promise to save your home for a fee.

A warning sign is any company that seeks you out, or that demands an upfront fee before providing services. Companies that tell you to stop communicating with your lender or try to sell you a “forensic loan audit” are not helping you- they are trying to profit off a difficult situation and can make things worse

Your loan servicer can provide some no-cost guidance, or you can get free help from a HUD-approved housing counselor. It might also be worth seeking a foreclosure lawyer on your own to help you. Remember, anyone contacting you directly with help is most likely a scammer.

Our Company

The Advantage Real Estate Group is a Certified Short Sale Expert (CSSE) real estate brokerage focused on helping homeowners navigate a difficult situation with skill and compassion. ARG is experienced with traditional, distressed, bank-owned (REO), investment, and value-add property sales. For over 24 years we have worked with all homeowners to find the best solution that preserves their options and protects their future.