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LOAN MODIFICATION
Under this option, you reach an agreement between you and your mortgage company to change the original terms of your mortgage—such as payment amount, length of loan, interest rate, etc. In most cases, when your mortgage is modified, you can reduce your monthly payment to a more affordable amount.
A modification may be an option if:
You are ineligible to refinance
You are facing a long-term hardship
You are several months behind on your mortgage payments or likely to fall behind soon
What are the benefits?
Resolve your delinquency status with your mortgage company immediately
May reduce your monthly mortgage payments to a more affordable amount
Change the original terms of your mortgage permanently, giving you a new start
Less damaging to your credit score than a foreclosure
Stay in your home and avoid foreclosure
How does it work?
A modification involves one or more of the following:
Changing the mortgage loan type (e.g., changing an Adjustable Rate Mortgage to a Fixed-Rate Mortgage)
Extending the term of the mortgage (e.g., from a 30-year term to a 40-year term)
Reducing the interest rate either temporarily or permanently
Adding any past-due amounts, such as interest and escrow, to the unpaid principal balance, which is then reamortized over the new term
HAVE QUESTIONS?
SUBMIT FORM
It is recommended that you seek the advice of a real estate attorney or tax advisor
Guidelines By Fannie Mae
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