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2009-04-09 15:12:45

How Does a Mortgage Loan Modification Program Work?


A mortgage loan modification is basically a restructuring of an existing mortgage loan so that it becomes easier for the borrower to make mortgage payments. A lender modifies a loan when he finds that the borrower is in real financial hardship and he is not able to refinance the loan. Normally, an adjustable rate mortgage (ARM) is switched to a fixed rate mortgage. This helps the borrower save his home from impending foreclosure.
Following are the steps involved in a mortgage loan modification program:
Step 1) The initial step is discussion. You just have to complete an online form or call up the loan modification company and one of their loan modification experts would get in touch with you. No fee is required for this session.
Step 2) Following theinitial discussion, the mortgage loan modification company would decide whether your profile is suitable for their loan modification program. At the time of initial discussion, you would face a range of questions. You should reply to them frankly and to the best of your knowledge. This would make your entire situation better.
Step 3) If itis collectively decidedthatyou aresuitablefor theprogram, then a mortgage loan modification agreement would be sent to you. This agreement would include the borrower’s authorization. This would allow the team of loan modification experts to negotiate with your lender. You also have the opportunityt o observe your progress.
Step 4) Along withtheloanmodificationprogram agreement, some companies would also provide a loan modification financial worksheet. These documents would help you deal with elaborated features of your present and past financial records. The loan modification experts would co-operate with you in filling out these documents.     
Step 5) As soonas yourdocumentsare furnishedto them, they would start negotiating with your creditors and the proposal of the package is sent to them. At a time when the package is being formulated, the modification experts would be carrying out a forensic loan audit to detect if there are any predatory lending activities.
Step 6) Usually, the entire procedure requires between 60-90 days to finish. When finished, the new loan documents would be sent to you for implementation.        

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