A loan modification is a change to the original terms of your mortgage loan. Unlike a refinance, a loan modification doesn’t pay off your current mortgage and replace it with a new one. Loan term changes: If you’re having trouble making your monthly payments, your lender may modify your loan and extend your term.

Is a loan modification a foreclosure?

A mortgage loan modification is one of the most common types of loss mitigation, the term for techniques to prevent a foreclosure. The modification changes the original terms of the promissory note to reduce the amount of the monthly payments, usually while lengthening the term of the mortgage to compensate.

How does a home loan modification program work?

A loan modification is a negotiation between you and your lender. It begins by contacting your mortgage company, discussing your problem, and proposing a solution that involves modifying the loan. How Government Loan Modification Programs Work The purpose of a mortgage modification is to get your monthly payment to a more affordable level.

Who is eligible for a government loan modification?

Some borrowers are eligible for government assistance in loan modification. Although a loan modification may be made for any type of loan, they are most common with secured loans such as mortgages. A loan modification is typically granted to a borrower in financial crisis who can’t repay the loan under its original terms.

How long does it take to get a loan modification from Wells Fargo?

Sending documents individually can slow down the process. We’ll review your request as quickly as possible, but it may take up to 30 days to process your application. If you have questions or want updates during the review period, check your status online or call your Wells Fargo home preservation specialist.

When do you get a loan modification from Chase?

“Chase doesn’t let anyone get into a modification until they’ve proven for three months that they can make that newly lowered payment,” he says. Be sure to ask questions about the terms and fine print because all lenders are different. Borrowers may find personal loans for bad credit but pay higher prices the lower their credit score.