Answers to Common Questions
 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
Can the lender include late charges in the Loan Modification?
Per HUD, the accrued late charges should be waived by the lender at the time of the loan workout-this varies depending on the type of loan-but always request a complete breakdown and description of all fees and penalties from your lender
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.
How do I know if I will qualify for a loan modification?
The number one criteria your lender is looking at is your ability to make the new modified payment now and in the future. You need to supply the lender with proof of your income, along with a complete and accurate financial statement detailing your income and expenses to show them that if granted the modification, you will be able to afford the new, lower payment
Do I have to be currently delinquent on my payments to get a loan modification?
Most lenders are now accepting applications from homeowners who are not currently delinquent, but who are able to prove to their bank that due to imminent interest rate increases, they will no longer be able to afford the loan payment under the terms of their loan. It is advisable to contact your lender as soon as possible to start the loan modification process, regardless of if you are delinquent or not.
What is an acceptable Hardship situation?
Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the lenders consider divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service to be acceptable reasons to consider a loan modification. A compelling hardship letter included in your application is a very important part of a successful application.
Will a loan modification help me stop foreclosure?
Yes, that is the goal-by working with your lender to find a loan workout solution, your loan is brought current and the foreclosure process is halted.
Can my missed payments be added back into my new loan modification?
Yes, the arrears can be added to the new loan balance and spread out over the term to allow the loan to be brought current.
So how do I get started to modify my loan?
Before contacting your bank's loss mitigation department or a loan mod company, do your homework-learn as much as you can about the loan modification process so you can make informed decisions.
Can the lender include late charges in the Loan Modification?
Mortgagee Letter 2008-21 states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.
Does it matter if my credit score has gone down since I purchased my home?
No, what matters is that we are able to get the lender to accept a modification with terms that the lender believes you can fulfill.
"Hiring an attorney to modify my loan was a great decision.I received much better terms than I even knew were possible."
J. Morgan, Riverside, CA
"The fear of losing my home was ruining my life. Having real professionals handle my case ended the nightmare."
L. Hernandez, Ventura, CA
"I wouldn't trust anyone but First Source Law to handle my loan modification. They are superb."
J. Garcia, Scottsdale, AZ
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