According to the U.S. Department of Housing and Urban Development a loan modification is a permanent change in one or more of the terms of a mortgagor’s loan, which allows a loan to be reinstated and results in a payment the mortgagor can afford.
Because a loan modification is designed to help struggling homeowners keep their homes certain requirements are mandated.
A loan modification:
- must result in a fixed rate loan
- must fully reinstate the loan
- must include all unpaid past due payments
- must waive any unpaid late fees
- may result in a permanent change of interest rate
- may extend the loan term
Procedures for a Loan Modification
- We are required to assess your financial condition.
- We perform a retroactive escrow analysis at the time the loan modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.
- We must verify the property has no adverse physical conditions.
- Home repair costs may not be calculated into the Loan Modification.
- Mortgagee must comply with State and Federal disclosure laws or notice requirements, including whether recordation is necessary to maintain first lien position requirement.
- Loans reinstated using a Loan Modification within the past 3 years requires written justification prior to a subsequent modification.
- Subsequent reason for default cannot be related to the previous reason for default.
For a complete explanation on these or any other loan modification questions you may have please contact us at 317-570-6300 and speak with one of our loan modification specialists today.
To start your loan modification please apply now!