Top 10 Questions About Loan Modifications

[Jennifer Griner]

The loan modification process can be overwhelming and confusing for many distressed homeowners. Programs and guidelines are changing and it is getting much easier for homeowners to get the help they need.

To help you understand how the process works and what you can expect, here are the Top 10 Frequently Asked Questions and their Answers:

1. What exactly is a loan modification?
A loan modification is a permanent change in one or more terms of a borrower's home loan, allows the loan to be reinstated, and results in a payment the homeowner can afford

2. Can the lender include late charges in the Loan Modification?
The federal plan mandates that the bank waive any administrative charges, late fees and penalties when offering a loan workout.

3. How will the new government programs help me get a loan modification?
The Federal government has allocated $75 billion dollars to subsidize lenders and servicers who offer a loan workout to their clients. Now, the banks will have a monetary incentive to offer help to qualified borrowers. In addition, homeowners who pay their new modified payments on time will be eligible up to $5000 credit to their loan balance.

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