What Is a Mortgage Remodification?

Loan modification may help you avoid foreclosure and keep your house.

If you find yourself financially unable to meet the current repayment terms of your mortgage loan, you may request a mortgage remodification from your lender to help you avoid foreclosure.

Facts

A mortgage remodification, more often referred to simply as a "loan modification," occurs when a lender restructures a consumer's original mortgage loan to help him afford his mortgage payments more easily.

Features

A modification of a mortgage loan could include a lower interest rate, reduced fees or an extended repayment period.

Time Frame

A loan modification application may take several months to be approved, depending on your lender and the complexity of your situation.

Benefits

A modified mortgage loan can help a struggling borrower avoid a foreclosure or short sale. It also benefits the lender by preventing the lender from having to pay the sometimes steep costs of a foreclosure.

Considerations

Some lenders are not willing to negotiate the terms of an individual's mortgage loan until the individual is already behind on his mortgage payments.

References

• Zillow Blog: What is a Loan Modification and Who Qualifies for One?
• RIS Media: How Long Does a Loan Modification Take?

Resources

• U.S. Dept. of Housing and Urban Development: Loan Modificaton FAQ