What is Loan Modification?

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Whether you call it a loan modification , mortgage modification, restructuring, or a workout plan it can all seem very confusing. Let Legal Loan Bailout help make it easier. A loan modification is when a borrower - who is facing great financial hardship and is having difficulty making their mortgage payments - works with their lender to change the terms of their mortgage loan. The workout plan could result in temporary or permanent changes to the mortgage rate, term and monthly payment of the loan. The plan's goal is to help the borrower reduce their monthly mortgage payments to 31% of their gross income. Under Obama's Bailout Plan, loan modifications will be standardized, with uniform loan modification guidelines used by Fannie and Freddie Mac, and then they will be implemented throughout the entire mortgage industry.

A large number of homeowners will use loan modification to prevent foreclosure on their home. For anyone who is unable to make their monthly payments, or is in danger of being buried under a past-due balance, Legal Loan Bailout's skilled attorney partners will contact your lender on your behalf to renegotiate the terms of your loan. We can help save your home and your credit.

Apply today for a Free Consultation to have a Legal Loan Bailout loan modification expert contact you.

Who is eligible for a loan modification?

According to the Department of Treasury: "Anyone with high combined mortgage debt compared to income or who is "underwater" (with a combined mortgage balance higher than the current market value of his house) may be eligible for a loan modification. This initiative will also include borrowers who show other indications of being at risk of default. Eligibility for the program will sunset at the end of three years."

As reported in the LA Times, "This program applies to borrowers who are unable to make - or are struggling to make - mortgage payments that exceed 38% of their monthly income. If the lender agrees to lower the interest rate or reduce the principal amount to bring the payment to 38% of the borrower's income, the government will pay half of the additional cost to the lender to reduce the payment to 31% of the borrower's income."

Who's not eligible for a loan modification?

Lenders will give unrepresented clients all types of excuses why you supposedly don't qualify for loan modifications, but often times that's not the case. Over half of our clients have been turned down when they tried on their own. Our trained professionals have worked with every lender and know just how to structure your request to get it done. The only real reason you would have difficulty obtaining a loan modification is if you are unemployed or have already received a loan modification in the last 12 months.

Apply today for a Free Consultation to have a Legal Loan Bailout loan modification expert contact you.

How does someone get a loan modification?

Apply for a loan modification Free Consultation with Legal Loan Bailout today. Our attorney partners will contact your lender - the company that's servicing your mortgage- and initiate the loan modification process with the loss mitigation department. We have the experience and training to get aggressive new terms on your mortgage.

Depending on the direness of your financial difficulties, it may be advisable to hire specific legal counsel. Get a referral from your local state bar association. Or, call a local HUD-Approved Housing Counseling Agency for guidance.

Words of warning: This new bill has spawned a whole new wave of loan modification institutes who might be perfectly fine as well as those who are not. Be careful.

Why would lenders modify your loan?

Incentives. The plan also includes incentives to encourage mortgage servicers - who collect fees for refinanced and delinquent mortgages - to work with qualified borrowers to modify loans. Servicers will get $1,000 for each eligible modification they make, and another $1,000 a year for three years as long as the homeowner remains current on payments. Homeowners who stay in their properties and are current will get a monthly balance reduction to help reduce their loan principal. That will amount to up to $1,000 a year for five years.

Also, banks would rather have you stay in your home - even if they're not making the full amount they signed up for - rather than have the house go into foreclosure. They stand to lose more if you foreclose than if your loan is modified.

Legal Loan Bailout knows that a home is more than a house. It's where your family lives and grows. It's where your dreams are built.

Apply today for a Free Consultation to have a Legal Loan Bailout loan modification expert contact you.