Loan Modification Disputes Explained

Angry couple arguing with bank manager complain on bad contract - Loan Modification Disputes Debt Relief Foreclosure Defense Group

Understanding Loan Modification Disputes

As a mortgage holder, there are many stresses you may be facing. This is especially true in times of financial hardship. Lenders are not the most flexible parties, and this can lead to significant issues if you can’t pay your mortgage. If you are struggling to pay your monthly mortgage rate, this puts you at risk of foreclosure and losing your home. Depending on your individual loan and circumstances, you may be eligible to request a loan modification. These may allow you to stay up to date with your mortgage payments. However, you may run into loan modification disputes between you and your lender.

Below, we’ll walk through loan modifications and types of disputes that may occur.

What is a Loan Modification?

Angry couple arguing with bank manager complain on bad contract - Loan Modification Disputes Debt Relief Foreclosure Defense Group First off, when you can’t make your monthly mortgage payments you are at risk of foreclosure. In these instances, a loan modification is an option for you. Loan modifications are what occurs when a lender makes a change to the current terms of a pre-existing loan.

The borrower must agree to the new terms. Loan modifications can involve reducing your rates, adjusting the interest rate, making the loan term longer, decreasing the principal, or a combination of adjustments.

Loan modifications are becoming more and more common due to the COVID-19 pandemic so you are not alone. In the fourth quarter of 2020, servicers completed 41,030 mortgage modifications.

It’s important that you negotiate these terms rather than let your lender dictate them. This way, you can ensure you’ll have the best financial outcome.

Benefits of Modifying Your Loan

There are many clear benefits of modifying your mortgage loan. Most obviously, you may avoid foreclosure altogether. When you modify, your lender may be able to review your information and reevaluate your circumstances, even if foreclosure is already scheduled.

The lender is not required to forego foreclosure, though. The next benefit of a loan modification is potentially lower monthly payments to reduce your costs and financial burden.

The lender should take your current hardship into account, as your modified payment amount will likely be based on your current financial standing. Lastly, modifying your loan can be less detrimental to your credit score than a foreclosure can. Keep in mind that loan modifications are long-term and permanent changes to your loan.

Thus, if your hardship is temporary, you may not benefit most from a loan modification.

Loan Modification Disputes

In the process of a loan modification, there are many working parts. You and the lender both have things to gain – and lose. Lenders will typically make modifications that benefit them more in the long run. It’s important to recognize this and negotiate the terms of your modification.

However, this may result in a loan modification dispute or disagreement. In these circumstances, you may disagree about the monthly mortgage rate, extended loan period, or many other factors. For these reasons, it’s important to know what you’re negotiating and how each modification can affect you. With this, consider hiring an experienced attorney.

Common loan modification disputes we see at our Foreclosure Defense Law Firm include loan fraud, coercion, failure to pay, and unauthorized rate increases. If you have been the victim of any of these types of modifications, you may have legal recourse and it’s important to speak with an experienced loan modification dispute attorney as soon as possible to protect your rights.

Schedule A Free Consultation With An Experienced Attorney Today

If you’re going through financial hardship and need to modify your loan, hire an experienced foreclosure attorney today. They can walk you through the process of any loan modification dispute that you encounter. In fact, most successful loan modifications occur with the assistance of an attorney’s negotiation.

The experienced Florida foreclosure attorneys at our Foreclosure Defense Law Firm have been helping modify loans for a combined 30 years. Our knowledge shows through our A+ BBB rating and our satisfied clients. To make your loan work well for you, the attorneys at our Foreclosure Defense Law Firm can help.

Be sure to call or contact us for a free consultation to discuss how our attorneys can help you get through any loan modification dispute, foreclosure, or mortgage complication today.

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