If you have fallen behind on your monthly mortgage payments and are faced with foreclosure, a mortgage loan modification may be a viable solution. What is a mortgage loan modification? Simply put, it is not a new loan; but an agreement between you and your lender to modify one or more of the terms of your existing mortgage thereby allowing the loan to be reinstated.
While each lender’s program is unique, typical modifications result in the negotiation of a lower interest rate, a fixed rate mortgage, and/or lower monthly payments. The end goal of both the mortgagor and the bank is a payment that the mortgagor can afford, thus facilitating keeping them in the home.
There are countless entities who offer mortgage loan modifications, however, your attorney will be best suited to negotiate the modification and explain its benefits and risks to you given the fact that a mortgage loan modification will result in new legal rights and obligations with respect to your existing mortgage.
With respect to legal fees, foreclosure costs, and late charges, lenders are permitted to capitalize legal fees and related foreclosure costs into the modified principal balance. However, late charges should be waived at the time of the loan modification.
Before contacting your attorney regarding a mortgage loan modification, it’s best to gather some preliminary information:
- the name of your current lender
- your current lender’s contact information
- the loan number
- a brief summary of the current state of the loan
- any documentation that supports evidence of an economic hardship
Preparing this information in advance will provide your attorney with all of the information necessary to negotiate a modification with your lender, thereby expediting the process.
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Tim Ryan 
