{"id":4660,"date":"2021-10-19T09:00:46","date_gmt":"2021-10-19T09:00:46","guid":{"rendered":"https:\/\/cutlerbankruptcy.com\/?p=4660"},"modified":"2022-02-16T13:59:41","modified_gmt":"2022-02-16T13:59:41","slug":"what-are-the-loan-modification-requirements-in-illinois","status":"publish","type":"post","link":"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/","title":{"rendered":"What Are the Loan Modification Requirements in Illinois?"},"content":{"rendered":"<h2><span class=\"ez-toc-section\" id=\"Loan_Modification_Requirements_Explained\"><\/span><strong>Loan Modification Requirements Explained<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-663c9a56cec0f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-663c9a56cec0f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Loan_Modification_Requirements_Explained\" title=\"Loan Modification Requirements Explained\">Loan Modification Requirements Explained<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Basics_Of_Loan_Modification\" title=\"Basics Of Loan Modification\">Basics Of Loan Modification<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Important_Takeaways\" title=\"Important Takeaways\">Important Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Programs_for_a_loan_modification\" title=\"Programs for a loan modification\">Programs for a loan modification<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#How_Does_a_Loan_Modification_Work\" title=\"How Does a Loan Modification Work?\">How Does a Loan Modification Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#What_Are_Loan_Modification_Requirements\" title=\"What Are Loan Modification Requirements\">What Are Loan Modification Requirements<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Contact_your_lender\" title=\"Contact your lender.\">Contact your lender.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Confirm_your_financial_situation\" title=\"Confirm your financial situation.\">Confirm your financial situation.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Apply\" title=\"Apply.\">Apply.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Pass_the_trial_period\" title=\"Pass the trial period.\">Pass the trial period.<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Refinance_Vs_Loan_Modification\" title=\"Refinance Vs. Loan Modification\">Refinance Vs. Loan Modification<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Modification_Vs_Suspension\" title=\"Modification Vs. Suspension\">Modification Vs. Suspension<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Loan_Modification_Frequently_Asked_Questions\" title=\"Loan Modification Frequently Asked Questions\">Loan Modification Frequently Asked Questions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#What_happens_when_a_loan_is_modified\" title=\"What happens when a loan is modified?\">What happens when a loan is modified?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#How_long_will_it_take_for_a_loan_modification_to_take_effect\" title=\"How long will it take for a loan modification to take effect?\">How long will it take for a loan modification to take effect?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Is_loan_modification_detrimental_to_your_credit\" title=\"Is loan modification detrimental to your credit?\">Is loan modification detrimental to your credit?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Is_it_possible_to_be_denied_a_loan_modification\" title=\"Is it possible to be denied a loan modification?\">Is it possible to be denied a loan modification?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#What_is_the_cost_of_modifying_a_mortgage\" title=\"What is the cost of modifying a mortgage?\">What is the cost of modifying a mortgage?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Are_loan_modifications_subject_to_repayment\" title=\"Are loan modifications subject to repayment?\">Are loan modifications subject to repayment?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/cutlerbankruptcy.com\/what-are-the-loan-modification-requirements-in-illinois\/#Hiring_a_Loan_Modification_Attorney\" title=\"Hiring a Loan Modification Attorney\">Hiring a Loan Modification Attorney<\/a><\/li><\/ul><\/nav><\/div>\n\n<p><a href=\"https:\/\/cutlerbankruptcy.com\/wp-content\/uploads\/2021\/10\/Loan-Modification-Requirements.webp\"><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-4663\" title=\"Loan Modification Requirements\" src=\"https:\/\/cutlerbankruptcy.com\/wp-content\/uploads\/2021\/10\/Loan-Modification-Requirements.webp\" alt=\"Loan Modification Requirements\" width=\"700\" height=\"467\" srcset=\"https:\/\/cutlerbankruptcy.com\/wp-content\/uploads\/2021\/10\/Loan-Modification-Requirements.webp 1024w, https:\/\/cutlerbankruptcy.com\/wp-content\/uploads\/2021\/10\/Loan-Modification-Requirements-300x200.webp 300w, https:\/\/cutlerbankruptcy.com\/wp-content\/uploads\/2021\/10\/Loan-Modification-Requirements-768x512.webp 768w, https:\/\/cutlerbankruptcy.com\/wp-content\/uploads\/2021\/10\/Loan-Modification-Requirements-960x640.webp 960w, https:\/\/cutlerbankruptcy.com\/wp-content\/uploads\/2021\/10\/Loan-Modification-Requirements-480x320.webp 480w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\">When the market crashed and people started losing their houses to foreclosure, loan modification became a hot topic to many homeowners. It caught on like wildfire, and many found themselves asking, &#8220;What are loan modification requirements?&#8221;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Today we&#8217;re talking about loan modification requirements. If you&#8217;re late paying your bills and fear that foreclosure or bankruptcy is inevitable, then a loan modification may be the answer to your problems. Let&#8217;s learn more about what those requirements are. Keep reading to learn more.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Basics_Of_Loan_Modification\"><\/span><b>Basics Of Loan Modification<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A loan modification is <a href=\"https:\/\/cutlerbankruptcy.com\/know-about-loan-modification-in-illinois\/\">when a lender adjusts the terms of an existing loan<\/a>. It may take the form of a lower interest rate, an extension of the repayment period, a switch to a different type of loan, or a combination of the three.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These modifications are frequently made as a result of the borrower&#8217;s inability to repay the original loan. The majority of successful loan modification negotiations take place with the assistance of an attorney or a settlement business. Certain borrowers may be eligible for federal loan modification aid.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Important_Takeaways\"><\/span><strong>Important Takeaways<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A loan modification is often granted to a borrower who is experiencing financial difficulty and cannot pay back the loan according to its original terms.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Typically, successful candidates retain the services of legal or other professional counsel.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Certain consumers have access to <a href=\"https:\/\/www.fhfa.gov\/Homeownersbuyer\/MortgageAssistance\" target=\"_blank\" rel=\"noopener\">government assistance programs for mortgage holders<\/a>.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A lender may agree to a loan modification throughout a settlement or in the event of a possible foreclosure. In certain instances, the lender has determined that a loan modification will be less expensive for the firm than foreclosure or charge-off.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A loan modification is not synonymous with forbearance. A forbearance arrangement provides temporary respite to a borrower who is experiencing a temporary financial difficulty. Loan modification agreements are intended to be long-term in nature.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A loan modification may include a lower interest rate, a more extended repayment period, a change in the type of loan, or any combination of these.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are two expert aid options available while negotiating a loan modification:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Settlement businesses are for-profit entities that negotiate with creditors on behalf of borrowers to reduce or eliminate debt.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Mortgage modification attorneys are experts at negotiating on behalf of homeowners whose <\/span><a href=\"https:\/\/cutlerbankruptcy.com\/are-mortgage-modifications-a-good-idea\/\">mortgages are in default and at risk of foreclosure<\/a>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Programs_for_a_loan_modification\"><\/span><b>Programs for a loan modification<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Some lenders and servicers provide loan modification options that can be temporary or permanent.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You may be qualified for alternative programs that can help you modify or refinance your mortgage if your lender does not have one.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The federal Home Affordable Modification Program ended in 2016. The <a href=\"https:\/\/my.sf.freddiemac.com\/servicing\/flex-modification\" target=\"_blank\" rel=\"noopener\">Flex Modification program<\/a>, launched by Fannie Mae and Freddie Mac on Oct. 1, 2017, aims to prevent foreclosures. This program may be available if your mortgage is owned or insured by Fannie or Freddie.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The government Home Affordable Refinance Program (HARP) assisted underwater homeowners in refinancing. HARP is also gone. HARP was replaced in 2019 by <a href=\"https:\/\/singlefamily.fanniemae.com\/media\/8711\/display\" target=\"_blank\" rel=\"noopener\">High Loan-to-Value Refinance Option<\/a> and Enhanced Relief Refinance.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Does_a_Loan_Modification_Work\"><\/span><b>How Does a Loan Modification Work?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A loan modification is a contract between you and your lender. The details of the agreement are negotiated between you and the lender. You make a list of all the modifications you wish to make to your loan.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You agree to make them. In return, the lender agrees to change your terms.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The lender&#8217;s terms are the part of the agreement that it signs. These are sometimes called &#8220;modifications.&#8221;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A loan modification agreement is a contract. If you sign it, you agree to the changes the lender makes. These may include the interest rate or the monthly payment. If you go back and forth with the lender, it may say the changes it makes to your agreement are &#8220;options&#8221; that it may exercise.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Lenders are generally prepared to modify loan terms because <a href=\"https:\/\/cutlerbankruptcy.com\/understanding-bankruptcy-can-help-foreclosure\/\">foreclosure<\/a> is more costly and time-consuming. Depending on the lender and program, you could:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reduce your mortgage rate by one or two points to reduce your monthly payment. Ask if the interest rate will rise again. According to some lenders, your interest rate and monthly payment would steadily climb throughout the loan duration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Longer mortgage terms mean cheaper monthly payments, which can help you stretch your budget. But you&#8217;ll pay more interest over time.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If you have an ARM (alternative to a fixed-rate mortgage), and your payments fluctuate, your lender may agree to a fixed-rate loan. Your payments may become more predictable and affordable due to the fixed rate.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reduce your loan&#8217;s principal: Your lender may reduce your loan&#8217;s principal, so you repay less. This is an unusual adjustment because it offers the borrower free equity. If you&#8217;re given this choice, find out if the principal is taxable.<\/span><\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Are_Loan_Modification_Requirements\"><\/span><b>What Are Loan Modification Requirements<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">No laws expressly state who is eligible for a loan modification and who is not. However, lenders typically use the same principles and criteria when determining whether to modify a borrower&#8217;s loan.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Generally, most lenders consider the following:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your financial situation. The servicer will assess your income, loan payment history, and financial situation as part of the review process.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Whether you are <a href=\"https:\/\/cutlerbankruptcy.com\/requirements-chapter-13-hardship-discharge\/\">experiencing legitimate economic hardship<\/a>, almost usually, lender standards require the borrower to have encountered a problem that rendered the current payment amount untenable. A genuine financial hardship is an unforeseen or uncontrollable event, such as the death of a co-borrower, job loss, or divorce.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Financial capability. Creditors want to verify that you have a steady income stream, even if it is less than it was when you took out the loan. For instance, a borrower who has re-entered the labor force following a period of unemployment may qualify for a modification that reduces monthly payments.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The specific criteria that a borrower must meet differ by lender. Depending on your loan type and circumstances, you may be eligible for a Fannie Mae or Freddie Mac modification, an FHA modification, or a proprietary (in-house) modification.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Understanding loan modifications might help you assess your eligibility. Here&#8217;s how to obtain one:<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Contact_your_lender\"><\/span><strong>Contact your lender.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/cutlerbankruptcy.com\/determine-bankruptcy-best-option-settling-debt\/\">Discuss loan modification and other payment help options with your loan servicer<\/a>. Explain why you&#8217;re behind on payments and how you plan to catch up.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ask about the next actions and required papers if you qualify for a loan modification. Seek the help of a reliable load modification attorney to help you with your case.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Confirm_your_financial_situation\"><\/span><strong>Confirm your financial situation.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The lender will require verification of your finances. To display your income and costs, gather your:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Receipts<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cheques<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bills each month<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Asset records<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You may also need to comply with an <a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-4506-t\" target=\"_blank\" rel=\"noopener\">IRS Form 4506-T<\/a>, allowing your lender to examine your tax records.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Write a hardship letter explaining how you fell behind on payments and how you plan to catch up. Your other records should back this up.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Apply\"><\/span><strong>Apply.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It takes around weeks from start to finish. The lender should respond in 30 days.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Before you sign off on the mortgage modification, be sure you understand how the lender will report your account to the credit bureaus.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pass_the_trial_period\"><\/span><strong>Pass the trial period.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">To make sure you can afford the additional monthly payment, the lender may impose a three-month trial. You can permanently adjust your loan terms if you make three timely payments.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Refinance_Vs_Loan_Modification\"><\/span><strong>Refinance Vs. Loan Modification<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Refinancing is frequently the first course of action for homeowners seeking a lower monthly mortgage payment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Refinancing enables you to exchange your current loan for one with a cheaper interest rate and a longer duration. This may lead to a permanent reduction in mortgage loan payments without hurting your credit score negatively.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Therefore, debtors who are experiencing financial hardship may be unable to refinance. <\/span><span style=\"font-weight: 400;\">They may have difficulty qualifying for the new loan due to decreased income, decreased credit score, or unforeseen debts (such as medical expenses). <\/span><span style=\"font-weight: 400;\">The homeowner may be qualified for a mortgage loan modification in these instances.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Typically, loan modification is intended for homeowners who cannot refinance their mortgage due to financial difficulties.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Mortgage modification is often reserved for customers who do not qualify for refinancing and have exhausted all other available choices for mortgage relief. <\/span><span style=\"font-weight: 400;\">A loan modification is a method in which you engage with your current bank or lender to adjust the conditions of your existing mortgage.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you&#8217;ve defaulted on an existing mortgage, the likelihood is that your credit has been damaged to the extent where a new lender would be hesitant to provide you with a new loan.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Generally, refinancing is not an option in this case.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a result, there is no genuine competition between a loan modification and refinancing. The best course of action for you will depend on the status of your present loan, your personal resources, and the terms agreed upon by your mortgage lender.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Modification_Vs_Suspension\"><\/span><strong>Modification Vs. Suspension<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Servicers can also help borrowers by forbearing payments. <\/span><span style=\"font-weight: 400;\">To help homeowners get back on track, loan forbearance suspends mortgage payments.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">During the COVID pandemic, many homeowners who lost employment or income may request forbearance for up to a year. <\/span><span style=\"font-weight: 400;\">Unlike forbearance, mortgage loan modification permanently alters a loan&#8217;s rate or terms. <\/span><span style=\"font-weight: 400;\">Mortgage relief plans that include forbearance and loan modification can be more successful.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Those unable to pay their mortgage after the forbearance period may be granted a permanent loan modification.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">An unpaid principal may be deferred until the conclusion of the repayment period if a homeowner is authorized for a mortgage modification.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Loan_Modification_Frequently_Asked_Questions\"><\/span><strong>Loan Modification Frequently Asked Questions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"What_happens_when_a_loan_is_modified\"><\/span><strong>What happens when a loan is modified?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A loan modification is intended to assist a homeowner in catching up on past-due mortgage payments and avoiding foreclosure. If your servicer or lender agrees to a home loan modification, you may be able to reduce your monthly payment, extend or shorten the duration of your loan, or lower your interest rate.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_long_will_it_take_for_a_loan_modification_to_take_effect\"><\/span><strong>How long will it take for a loan modification to take effect?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">According to financial and insurance expert Karen Condor, the loan modification process typically takes between one and three months. Once authorized, the modifications to your interest rate and loan terms are permanent.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Is_loan_modification_detrimental_to_your_credit\"><\/span><strong>Is loan modification detrimental to your credit?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A modification of your mortgage loan under some government programs will not affect your credit.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, some loan modifications may have a detrimental effect on your credit and appear on your credit record. However, because a mortgage must typically be in default before you can request a modification, your financial issues are almost certainly already shown on your <a href=\"https:\/\/cutlerbankruptcy.com\/understanding-credit-reports\/\">credit report<\/a>.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Is_it_possible_to_be_denied_a_loan_modification\"><\/span><strong>Is it possible to be denied a loan modification?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Yes. A mortgage loan is a legally binding contract, and the mortgage lender is not required to consent to a loan modification.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_the_cost_of_modifying_a_mortgage\"><\/span><strong>What is the cost of modifying a mortgage?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While mortgage modifications are not subject to closing fees, your lender may charge a processing fee.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Are_loan_modifications_subject_to_repayment\"><\/span><strong>Are loan modifications subject to repayment?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Repayment of a loan modification will vary according to the type of modification granted. On the backend of your loan, your lender can apply a reduced interest rate to the principle that you must repay later.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With a principal deferral loan modification, your lender reduces the amount of principal paid every month.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the principle postponed by your lender will become payable when your loan matures or the home is sold.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hiring_a_Loan_Modification_Attorney\"><\/span><strong>Hiring a Loan Modification Attorney<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The modification process is complicated; their rules are often hard to understand. Lenders are careful to make sure that any modification they agree to is enforceable. A lawyer can make sure the lender follows the law. And a lawyer can help you negotiate.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Negotiation with a mortgage lender can be grueling, and you need a lawyer on your side, even if you are negotiating on your behalf. When the negotiation fails, a lawyer can help you take the case to court.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Such a hearing can be intimidating, and a lawyer knows which questions to ask to make the judge understand your situation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Yes. Getting professional help for loan modification requirements is a smart move. If your lender is dragging its feet, you will often be able to get some relief if you hire a lawyer.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When you hire our firm, Cutler &amp; Associates, Ltd.<\/span><span style=\"font-weight: 400;\">,<\/span><span style=\"font-weight: 400;\"> you get all of that. Consult with our <\/span><a href=\"https:\/\/cutlerbankruptcy.com\/\"><span style=\"font-weight: 400;\">loan modification and bankruptcy attorneys in Chicagoland <\/span><\/a><span style=\"font-weight: 400;\">today for a free consultation.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Loan Modification Requirements Explained When the market crashed and people started losing their houses to foreclosure, loan modification became a hot topic to many homeowners. It caught on like wildfire, and many found themselves asking, &#8220;What are loan modification requirements?&#8221; Today we&#8217;re talking about loan modification requirements. If you&#8217;re late paying your bills and fear [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":4663,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[],"_links":{"self":[{"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/posts\/4660"}],"collection":[{"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/comments?post=4660"}],"version-history":[{"count":3,"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/posts\/4660\/revisions"}],"predecessor-version":[{"id":5278,"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/posts\/4660\/revisions\/5278"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/media\/4663"}],"wp:attachment":[{"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/media?parent=4660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/categories?post=4660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cutlerbankruptcy.com\/wp-json\/wp\/v2\/tags?post=4660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}