Ways to Modify Mortgage Loan
April 7th, 2010
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Programs are now available for people who are currently challenged financially. These are designed to give each individual an increased capacity to pay their debts. Borrowers who are in default, in bankruptcy or in foreclosure would normally apply for a mortgage loan modification. This is the process wherein the regular terms of contract between the lender and borrower are modified.
Mortgage loan modification can be done in several different ways:
- Reduction of late fees and penalties
- Mortgage forbearance program
- Reduction of principal
- Interest rate reduction
- Shift from floating to fixed rate
- Lengthening of terms of loan
- Capping monthly payment to percentage of household income