If the COVID-19 pandemic affected your finances and you have been unable to make your mortgage payments in a timely manner, you may be at risk of facing foreclosure in the future. A loan modification process can reduce the amount that you owe your lender. Additionally, you may be able to stop the foreclosure process.
Lenders And Terms
A lender's objective is to provide funding for a defined term limit. If money is not paid back on time, interest is accrued. A borrower will be expected to pay the loan principal, plus pay any interest fees and penalties that they have been charged with. A borrower is always supplied with a listing of terms that relate to a home loan.
These terms indicate how long someone has to pay back a loan, plus defines the loan default process that a lending institution implements. A borrower cannot continue to avoid making payments on their mortgage. Eventually, a loan will go into default and a borrower will be faced with a foreclosure.
Law Services
A law service that handles loan modifications will provide a client with an unbiased opinion. A legal representative's duty is to furnish a client with all of the options that are available to them. Many legal service providers have a relationship with a series of banks. A legal representative will explain the risk that a client faces, concerning the avoidance of making payments. They will also outline how a loan modification process works.
A modification may involve a reduction in how much money needs to be paid on a loan each month, a reduction in the amount of principle that a borrower owns, the forgiveness of past due loan payments, or longer repayment terms. Interest rates may also be reduced. A client has the option of seeking a loan modification or seeking help with foreclosure. If a client has already received paperwork that states that their home is going into foreclosure, a legal professional may be able to stop the foreclosure process.
A client has the option of seeking a quick sale. A quick sale is a home selling process that will be conducted within a relatively short timeframe, in comparison to some standard selling practices. Once a client has decided how they would like to move forward, a legal representative will provide the client with paperwork that will need to be submitted to the lending institution that initially funded the mortgage.
Share7 September 2022
