8 QUERIES ABOUT HIGH RISK LOAN MODIFICATION
The process of loan
modification has been in existence since
several decades. Yet most people don’t
know the entire truth about it and how
it works. The lack of knowledge
regarding the loan modification process
makes it confusing and more frustrating
for those house owners who are faced
with the threat of foreclosure. To make
the most from this process you should
have a lot of knowledge about the
process so that you can exploit the
legal loopholes to save your house.
Being informed about the process will
also prevent scammers from taking you
for a ride and rob you off your hard
earned money. There are many websites
and books which will provide you with
accurate information regarding
foreclosure. Given below are eight
questions asked about loan modification.
What exactly is loan modification?
It is a modification in the terms and
conditions of your loan which is
permanent. Therefore, the debt has been
restructured in such a way that the
debtor is able to pay it.
Will late payment charges be included in
the restructured loan?
As per the law the accumulated late
payment fees must be waived off.
However, the new agreement can contain
late payment fees.
How can I get loan modification using
the government programs?
The U.S. government has set aside
seventy five billion dollars to
compensate for those lenders who allow
their debtors to modify their loan
agreements. This is a great motivation
for the banks to modify your loan so
that you can pay it back. Also, those
owners who don’t default on their
monthly instalments again are eligible
for a $5000 discount on the loan
When will I be eligible for the loan
The most significant criteria are:
whether you will be able to pay your
instalments after modifying the loan.
You should prove to your lender that you
will make the monthly payments with out
defaulting if your loan is modified. The
accepted documents for proving your self
are financial statements, receipts or
any other documents which can show that
you are capable of making payments.
Do I have to be a defaulter to become
eligible for loan modification?
No. It is better that you contact your
bank when you see the first sign of
financial problem. Most banks encourage
those borrowers who have not yet
defaulted to come for loan modification.
What are the situations that will make
the bank agree that the borrower is
facing financial trouble?
Every borrower has his own set of
problems. But, banks accept reasons like
military service, job relocation,
illness, death of spouse, decrease in
income and divorce, among others.
Can I prevent a foreclosure by modifying
Prevention of foreclosure is the primary
aim of loan modification. Therefore, you
can save your home. However, if you
default on payments even after loan
modification then you cannot be saved.
Can defaulted payments be included in
the modified loan?
This is left for the lender to decide.
However, if he wants to he can add the
defaulted payments to the modified loan.
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