A Reliance Loan Modification is a temporary or permanent
change in one or more of the terms of a loan allowing the loan to be reinstated
which typically results in a payment the borrower can afford. It is interesting
to note that in most cases a homeowner in need for mortgage help will indeed
qualify for a loan modification. To ensure that you understand what a loan
modification will actually do for you, consider the following facts:
• A loan modification is indicated when the original loan that is secured by a
residence has terms that make it impossible for the homeowner to continue making
the payments, thus risking the loss of the residence.
• Loan modifications are not the same as debt consolidations, refinancing loans,
or even forbearances. Instead, they are long term solutions for rising interest
rates or other hardships that are threatening to overwhelm the budget of a
homeowner.
• Loan modifications stop foreclosure proceedings and instead reinstate the
loans as they are being modified.
There are some other facts that explain why lenders are actually in favor of
working with borrowers and their legal specialists in order to negotiate
equitable loan modifications.
• All or portion of the outstanding principal and interest, past due escrow,
late fees, and even costs may be rolled into the loan modification and thus will
not be lost revenue to the lender. Since they are spread over a long period of
time, they do not pose a problem to the borrower. • Modified mortgages may use a
step rate approach or an extended term methodology to provide for the repayment
of the due and past due funds. The lower payments ensure the repayment by the
borrower while to the lender the added time is actually money in the bank in
terms of yet to be earned interest due.
• Foreclosure is avoided and even though banks routinely foreclose on properties
and sell the homes to other buyers for a fraction of a price, the slowing
housing market has made it difficult for banks to unload such properties and
then recover any additional funds from the previous homeowners. Loan
modification is a fiscally much more attractive solution for any lender.
Here are the requirements you must meet in order to be considered a good
candidate for a loan modification process to be started on your behalf:
• Your monthly mortgage must be affected by a verifiable reduction in income.
•
It is required that you are currently employed or have another source of a
stable and predictable monthly income that is provable.
• The home for which you are seeking to obtain a loan modification must be your
primary residence.
• Adjustable rate mortgage which is now requiring a higher payment.
Reliance, 450 South Gravers Road, Suite 220
Plymouth Meeting PA 19462
Hours of Operation are M-F 9am-6pm EST
