A loan modification is a permanent change in one or more terms of a borrower's home loan, allowing the loan to be reinstated, and resulting in a payment the homeowner can afford.

Per HUD, the accrued late charges should be waived by the lender at the time of the loan workout - this varies depending on the type of loan - but always request a complete breakdown and description of all fees and penalties from your lender.

The Federal government has allocated $75 billion dollars to subsidize lenders and servicers to help defer the cost of modifying a client's loan. Now, the banks will have a monetary incentive which will help make the modification approval easier for our attonreys. In addition, homeowners who pay their new modified payments on time will be eligible up to $5000 credit to their loan balance.

The number 1 criteria we need to prove is your ability to make the new modified payment now and in the future. You need to supply us with proof of your income, along with a complete and accurate financial statement, detailing your income and expenses so we can show the bank that, if granted the modification, you will be able to afford the new lower payment.

Most lenders will work with our clients who are not currently delinquent, but who are able to show that, due to imminent interest rate increases, they will no longer be able to afford the loan payment under the current terms of their loan. It is advisable, as soon as possible, to start the loan modification process, regardless of if you are delinquent or not.

Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the lenders consider divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service to be acceptable reasons to consider a loan modification. A compelling hardship letter included in your application is a very important part of a successful application.

Yes, that is the goal - by working with your lender to find a loan workout solution, our attorneys will work to bring your loan current and halt the foreclosure process.

Yes, the arrears can be added to the new loan balance and spread out over the term to allow the loan to be brought current.

That is entirely up to you and your comfort level dealing with your lender . But, something to consider is the willingness of the bank to really give you the best deal you can get. Without an attorney fighting on your behalf, you're left to accept or decline whatever the bank employees tell you is the best they can do. You have no idea whether or not it's the best long term option you have available. Generally, we've seen that banks are much quicker and more willing to cut a truly favorable deal when they're dealing with legal counsel.

Contact us for an application package and to get thoughtful answers to your questions. We're here to help you and your family, and want you to be informed. Most of all, we want to help give you a fresh start.

1st Choice Family Solutions offers a 100% money-back guarantee on residential loan modifications, other than Indiana and Illinois, if for some reason a loan modification is not granted.