mortgage

5 steps to a successful loan modification

Make sure the workout is sustainable
Make sure the workout is sustainable

Mortgage modifications result in lower interest rates, extended payback periods and (sometimes) forgiven debt. A modification is one way to save a mortgage. There are other types of loan workouts:

Forbearance. This allows you to skip payments or make partial payments while you go through a temporary hardship.

Repayment plan. You pay extra every month until you catch up after falling behind.

A workout has to be sustainable over the long haul, says Sue Hunt, director of housing counseling for debt counseling giant CredAbility, in Atlanta.

"Our job is to work with the homeowner to make sure that they've presented true and accurate figures to the servicer, so that the servicer can give them the best option that's available to them," Hunt says.

Hunt adds, "If we can present the case to a servicer that the original plan is not sustainable, and there's another option available, servicers will tend to do that."

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
MORTGAGE & REAL ESTATE NEWSLETTER

Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.

Blog

Holden Lewis

Cautious BofA heeds history

Remember the wise decision that Bank of America made in August 2001 in light of the decision it's making now.  ... Read more

advertisement
Partner Center
advertisement

Connect with us