Who is Eligible for a Mortgage Loan Modification?

If your lender grants you a mortgage loan modification, the terms of your current mortgage loan will change. A mortgage loan modification is beneficial because it can provide you with lower house payments and help you avoid foreclosure.

Loan Modification Eligibility

Your eligibility for a loan modification depends on your lender and your loan servicer. Not every lender offers mortgage modifications as an option for struggling homeowners. If your mortgage loan is held by Fannie Mae or Freddie Mac, however, you may qualify for a loan modification through the government’s Making Home Affordable program. Government-backed loan servicers are required to evaluate loan modification eligibility for every consumer who requests a modified home loan.

Qualifying for a Loan Modification

Every mortgage lender’s policies concerning loan modifications will differ. Common requirements, however, include proof that you have sufficient income to pay the new, modified mortgage payments and successful completion of a “trial” loan modification. Unfortunately, some lenders won’t consider modifying your mortgage loan until you miss one or more payments.

Loan Modification for the Unemployed

Although few lenders are willing to grant loan modifications to unemployed individuals, the Making Home Affordable program allows unemployed individuals to temporarily modify their home loans. After six months, if the homeowner finds employment, the servicer may convert the changes to a permanent modification.

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