Loan Modification FAQ’s

Liberty Credit Law, PC

What is foreclosure?
Foreclosure is legal proceedings that are initiated by a creditor to repossess property or a home after the borrower has become seriously delinquent on his/her payments.  Once a creditor initiates the foreclosure process, the home owner (borrower) will receive a written notice of foreclosure and will have a limited time to take action to prevent the foreclosure.

Can I prevent foreclosure?
When you know that you are facing foreclosure, you need to act quickly and also know that you have options. Two very effective options for stopping foreclosure are loan modification and short sale.  By obtaining a loan modification or by agreeing to a short sale, you may be able to stop the foreclosure process and work with your lenders to come up with mutually beneficial terms.

What is loan modification?
Loan modification is a permanent change in the terms of a home loan or mortgage.  Loan modifications are agreed to by both the lender and the borrower.  There are numerous terms that may be modified within the home loan.  However, the most commonly modified terms are interest rates, length of loans and monthly payment amounts. 

How will loan modification help me?
Loan modification can help you in several ways.  First, if you are able to modify the terms of your home loan, you will be able to prevent foreclosure.  Second, one the terms of your loan are modified, you will be able to afford your monthly payments to your lender.  Finally, in some cases, you may be able to have your late fees eliminated which will save you a great deal of money.