What Is A Loan Modification?

A loan modification is a change to the terms of an existing loan made by the lender and the borrower. Changes may include a reduction in the interest rate, an extension of time for repayment, a different type of loan or a combination of these changes. The changes are often made because the borrower is unable to repay under original loan terms. Some people are eligible for government assistance programs for a loan modification. Although a loan modification is most commonly associated with a mortgage loan, it can be made for any type of loan.

The loan modification lawyers at Nager Law Group can evaluate your situation, help you understand your legal rights and determine whether you would likely qualify for a loan modification.

Do You Have To Be Behind On Payments For A Loan Modification?

Qualifying for a loan modification can be complicated. Each of the enders has their own specific standards. Many lenders will not consider your application for a loan modification program until you are behind on your payments.

There are different requirements for any particular type of loan modification. You must be suffering some financial hardship and without cash reserves that would allow you to make your mortgage payments each month. If a lending institution means you have the means to meet your payments, they will not approve you for a loan modification.

What Is Considered A Hardship For A Loan Modification?

A financial hardship occurs when you cannot make payments on your outstanding debts. A hardship for a loan modification is a situation that is long lasting. In other words, the hardship is expected to continue for months and is not expected to improve in the near future. The loss of a key source of income, excessive debt, military deployment, a natural disaster, illness or injury, costly medical expenses or a divorce may be considered a financial hardship. As an example, in a divorce situation, your income may be reduced from two paychecks to one. You may rely on credit cards to help meet expenses and eventually fall behind in your mortgage payments.

You may be required to show evidence of financial hardship including pay stubs, alimony, disability benefits, or child support. In addition, you may need to show bank statements and tax returns for the previous two years as well as an expense sheet listing all of your monthly expenses to be considered for a hardship loan modification.

Nager Law Group is known for its expertise in handling debt issues and for providing excellent customer service and legal representation to clients in Columbia, Annapolis and Towson, MD. They have a reputation for helping clients find the best solutions to their financial problems and achieving financial stability.

For more information on Loan Modification In The State Of Maryland, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (443) 492-9003 today.