Frequently Asked Questions
Get answers to all your questions that relate to your individual situation.
Q: What is a loan modification?
A: A loan modification is a change to the terms of your mortgage loan, such as the interest rate, loan term, or monthly payment amount. The goal of a loan modification is to make your mortgage more affordable and sustainable.
Q: Who qualifies for a loan modification?
A: Eligibility for a loan modification varies depending on the lender, but typically, borrowers who are experiencing financial hardship and are at risk of defaulting on their mortgage may qualify.
Q: How do I apply for a loan modification?
A: The process for applying for a loan modification varies depending on the lender, but typically it requires you to provide financial information such as income, expenses, and assets. You may also need to provide proof of hardship, such as a job loss or medical bills.
Q: How long does the loan modification process take?
A: The loan modification process can take several weeks or months, depending on the lender and the complexity of your case.
Q: Can a loan modification lower my interest rate?
A: Yes, a loan modification can lower your interest rate, which can make your monthly mortgage payment more affordable.
Q: Can a loan modification extend the term of my loan?
A: Yes, a loan modification can extend the term of your loan, which can lower your monthly mortgage payment.
Q: Can a loan modification forgive a portion of my loan balance?
A: In some cases, a loan modification may include a loan forgiveness component, which would forgive a portion of your loan balance.
Q: What is the difference between a loan modification and a refinance?
A: A loan modification changes the terms of your existing mortgage loan, while a refinance involves taking out a new mortgage loan to replace your existing one.
Q: What is foreclosure?
A: Foreclosure is the process by which a lender takes possession of a property when the borrower defaults on their mortgage.
Q: What are the stages of foreclosure?
A: The stages of foreclosure vary depending on the state, but generally include: missed payments, notice of default, auction/sale of the property.
Q: How can I stop foreclosure?
A: Ways to stop foreclosure can include: loan modification, refinance, short sale, Deed in Lieu of foreclosure, and bankruptcy.
Q: How long does it take for a foreclosure to happen?
A: The time it takes for a foreclosure to happen varies depending on the state, but it can take several months to several years.
Q: Can I still sell my house during the foreclosure process?
A: Yes, in some cases, you may be able to sell your house during the foreclosure process.
Q: Can I still rent my house during the foreclosure process?
A: It depends on the stage of foreclosure and the laws in your state. Typically, once the property has been sold at auction, the new owner has the right to evict any renters.
Q: Can I still live in my house during the foreclosure process?
A: It depends on the stage of foreclosure and the laws in your state. Typically, once the property has been sold at auction, the new owner has the right to evict any occupants.
Q: Will I owe anything after a foreclosure?
A: In some cases, you may still owe money to the lender after a foreclosure, this is called a deficiency balance.
Q: How long does the loan modification process take?
A: The loan modification process can take several months. It is important to keep in contact with your lender and provide any information they request in a timely manner.
Q: Will my credit score be affected by loan modification?
A: It depends on the specific circumstances of your loan modification. In general, loan modification is considered a less negative option than foreclosure, so it may have less of an impact on your credit score.
Q: How can I stop foreclosure?
A: You can stop foreclosure by bringing your loan current through a loan modification, refinance, or repayment plan.
Q: What is a repayment plan?
A: A repayment plan is an agreement between the borrower and lender to repay the past due amount over a period of time.
Q: Can I still sell my home during foreclosure?
A: Yes, you may still be able to sell your home during the foreclosure process, but it is important to contact your lender to find out what options are available.
Q: What is a short sale?
A: A short sale is a sale of a property in which the proceeds from the sale fall short of the outstanding debt. The lender must agree to the short sale and forgive the remaining debt.
Q: What is a deed in lieu of foreclosure?
A: A deed in lieu of foreclosure is a process in which the borrower voluntarily transfers ownership of the property back to the lender in exchange for the release of the borrower’s debt.
Q: What is a loan forbearance?
A: A loan forbearance is an agreement between the borrower and lender to temporarily postpone payments or reduce the amount of payments due.
Q: What is the Home Affordable Modification Program (HAMP)?
A: The Home Affordable Modification Program (HAMP) is a federal program that provides incentives to lenders to modify mortgages for homeowners who are at risk of foreclosure.
Q: What is the Home Affordable Refinance Program (HARP)?
A: The Home Affordable Refinance Program (HARP) is a federal program that helps homeowners who owe more on their mortgages than their homes are worth to refinance into more affordable loans.
Q: What is the Home Affordable Foreclosure Alternatives (HAFA) program?
A: The Home Affordable Foreclosure Alternatives (HAFA) program is a federal program that provides financial incentives to lenders and homeowners to pursue alternatives to foreclosure such as short sales and deeds in lieu of foreclosure.
Q: What are the eligibility requirements for HAMP?
A: Eligibility requirements for HAMP include: being the primary resident of the property, having a mortgage payment that is more than 31% of your gross income, and having a mortgage that was originated before January 1, 2009.