Fort Myers Loan Modifications

Loan modification became very popular after so many homes in the nation went into foreclosure after the housing bubble burst. Real estate prices in the nation hit all time high’s in the middle of the decade, only to come crashing down over the next couple of years. Many Florida homeowners suddenly found themselves upside down on mortgages, making high payments on homes that were no longer worth even a percentage of the remaining loan balance on the mortgage loan.

Many people were in financial distress in other ways as Florida and the country moved deeper into recession. Many homeowners lost their jobs during this period, as things seemed to spiral out of control financially. While foreclosure numbers were twice the national average in Florida, loan modification in Fort Myers became a popular option for many who could no longer make their regular mortgage loan payments to lenders.

Making Modification to the Existing Mortgage Work

The only way loan modification works for the homeowner in financial distress is to make changes to the structure of the existing home loan that make monthly mortgage payments decrease. To do this however, the mortgage lender has to be willing to modify the mortgage. This is often easier said than done.

How Banks View Loan Modification

Banks really don’t want to make changes to your existing home loan because they’re making money off of you under the current loan terms. The only reason they will consider a modification is if it is in their best interests in the long run.
Loan modification may benefit the lender for a few reasons:

1. You are delinquent on mortgage payments, the loan is in default and the prospects of catching up on your own are slim.
2. The liSunCoast Lawihood that the bank will end up foreclosing on the property at some point is high.

Most lenders want to avoid the costs and lengthy proceedings of foreclosure on the property if they can. By modifying the mortgage now, the lender will certainly lose money in the short-term in lowered monthly payments. If they modify the home loan now however, they will save money in the long run, by avoiding foreclosure. The bank has to weigh its options to decide which plan of action would help them make the most money off of the homeowner overall.

Other reasons a mortgage lender will modify a home mortgage are, if they are in violation of loan practices or if the original loan was made under illegal pretenses. If either is the case, the bank will need to make changes to the loan once loan documents have been examined.

Federal or In-house Modification — How Mortgage Lenders Do It

Mortgage lenders make loan modifications by either processing a loan modification application through the federal, HAMP (Homes Affordable Modification Program) program or directly through their financial institution.

Lenders modify loans several different ways. These usually involve lowering the interest rate of the loan, forgiving a portion of the loan balance, or extending the loan period. A combination of any of the three solutions can be made to lower monthly payments.

For more information on how SunCoast Law in Fort Myers and serving all of Lee County can help you get a loan modification contact our office at ‎(855) 215-2281.