What Is Mortgage Loan Modification?
WHAT IS
A Mortgage Loan Modification?
A mortgage loan modification is a change in your loan terms. The modification is a type of loss mitigation.
Benefits of Loan Modification
The modification can reduce your monthly payment to an amount you can afford.
Modifications may involve extending the number of years you have to repay the loan, reducing your interest rate, and/or forbearing or reducing your principal balance.
If you are offered a loan modification, be sure you know how it will change your monthly payments and the total amount that you will owe in the short-term and the long-term.
Tip: Carefully consider what kind of modification best addresses your needs. If you receive a loan modification and you still can’t make the payments, you may lose your home. If you’d like to learn more about your options, talk to a U.S. Department of Housing and Urban Development (HUD)-approved housing counseling agency. Call the CFPB at (855) 411-CFPB (2372) to be connected to a trained housing counselor.
Worried about foreclosure:
For more information about how to avoid foreclosure, use our checklist. If you are facing imminent foreclosure or have been served with legal papers, you may also need to consult an attorney.
For reference, https://www.consumerfinance.gov/ask-cfpb/what-is-a-mortgage-loan-modification-en-269/