Forbearance and Loan Modification

Fortunately for homeowners, there are options such as LIG Loan Modification Services that can help to stop this scenario from becoming a reality. There are alternatives to a foreclosure and they are within the reach of any homeowner.

One such option is a forbearance agreement. Forbearance is basically a request from the lender to suspend the payment of monthly amortization within a specific period. The borrower can choose, but is not obligated to pay, the interest only during the period of a loan suspension. If he cannot pay that interest, it may be added to the interest in the future payments after the termination of the forbearance. Or it can be added to the principal, thereby, extending the payment period.

Forbearance could be granted for a year. After it is served, the borrower continues with the usual payment. Hopefully, he has recovered from his previous financial constraints. This is a good form of temporary relief of such a heavy financial burden. This is good for those who are in temporary crisis such as temporary loss of job.

But for those who are looking for a long-term solution with their monthly mortgage bills, loan modification proves to be a life saver. Loan modification takes forbearance much further. With loan modification, it is possible not only to suspend your monthly payment, but to also reduce it to a lower one.

This is now the most preferred call to action for most homeowners facing possible foreclosure. Like any other method of anti-foreclosure measures, loan modification seeks approval from the lender. But unlike other measures, in loan modification, homeowners can assert rules in prevailing real estate conditions. If a homeowner found out that the property that they are making mortgage payments on is not worth the amount they are shelling out then loan modification is a way to adjust future payments. If the homeowner finds that their homes are worth every penny that they are actually paying for it, but still don’t want to lose it in a foreclosure or short sale, then loan modification gives them a sense of control to their situation.

Also, unlike a short sale, where you need a real estate lawyer, a real estate broker, a real estate agent, and an accountant, in loan modification you only need an expert to accomplish the job for you. A loan modification expert negotiates directly with your lender. He knows what it takes and how to communicate with the decision makers to make necessary adjustments to your mortgage.

Tom Brady is a Loss Mitigation Specialist for LIG Loan Modification Services.