Mortgage After Loan Modification Lending Guidelines

This BLOG On Mortgage After Loan Modification Lending Guidelines Was UPDATED On March 13th, 2019

Mortgage After Loan Modification Lending Guidelines

Home Buyers Can Now Qualify For A Home Loan After Loan Modification:

The purpose of loan modification programs is to modify the existing mortgage loan a homeowner has to make the monthly mortgage payments affordable and avoid foreclosure.

  • Loan modification can be done by restructuring the existing mortgage loan note
  • This can be done by decreasing the mortgage rates of the home loan and extending the term of the mortgage loan, thus, lowering the monthly payments
  • As long as the borrower has current income and can afford a reduced monthly payment, loan modification is an ideal compromise between buyer and lender
  • Loan Modification the homeowner can still own their home avoid foreclosure proceedings

Loan modification programs are easier to get these days from lenders due to the mass foreclosure crisis since the real estate and credit collapse of 2008.

Benefits To Homeowners

 Mortgage After Loan Modification Programs: Benefits To Homeowners

A loan modification is a great way of getting out of default of your mortgage loan and avoid foreclosure.

  • With a loan modification, the lender can reduce current mortgage rate and extend the terms of a mortgage loan to make new modified mortgage monthly payment affordable where the borrower does not have to struggle every month
  • The lender will be reviewing financials and before they will approve a loan modification
  • The lender will make sure that borrower will be able to afford it
  • A Loan Modification is not the end of the world in being able to obtain another mortgage loan in the future
  • Homebuyers or homeowners can qualify for a mortgage after loan modification after passing the mandatory waiting period
  • To qualify for an FHA loan after a loan modification, the waiting period is one year after the loan modification to qualify

To qualify for a conventional mortgage after a loan modification, the waiting period can be up to 4 years to get a mortgage after a loan modification.

Am I Eligible For A Loan Modification?

Am I Eligible For A Loan Modification?

There are two different types of loan modification programs.

  • Government
  • Private

Most loan modification programs require that the homeowner prove financial hardship due to job transfer or underemployment which resulted in a drastic loss of household income which affects them in making their mortgage payment.

  • They need to have a job and a consistent income source and provide W-2s, tax returns, and recent paycheck stubs
  • The mortgage lender will review income, assets, and liabilities and will offer the homeowner a revised monthly mortgage amount he or she is able to afford

Beware Of Loan Modification Companies

Beware Of Loan Modification Companies

You do not need a loan modification company to do a loan modification.

  • Contact current mortgage lender and speak with someone from the workout or loan modification department
  • Whatever a loan modification company can do, a homeowner can do it themselves
  • Remember that lenders are not in the business of real estate
  • Lenders do not want the property and will do everything possible to help homeowners avoid foreclosure
  • Homeowners who are adamant in hiring a loan modification company, make sure they do not charge an upfront fee for services not yet performed
  • Be careful with loan modification companies that ask for an up front processing fee which is the same as an upfront fee
  • It is illegal to charge a consumer an upfront fee for a loan modification, credit repair, or any type of mortgage/financial related services
  • Ask for references and check out their references
  • Use the powerful tool of Google to see if they are reputable
  • Make sure that there are not in any sort of investigation by a regulatory agency
  • In the event homeowners get loan modification request denied, there are other options available which include bankruptcy, deed in lieu of foreclosure, or short sale
  • A chapter 13 bankruptcy will allow homeowners to keep their home
  • The trustee will do a workout repayment plan where homeowners get to keep home and avoid foreclosure
  • If there is a will, there is always a way so do not panic and take one step at a time

How Can I Qualify For Mortgage After Modification

How Can I Qualify For Mortgage After Loan Modification

Gustan Cho Associates at Loan Cabin Inc. is a direct lender with no overlays on government and conventional loans. Over 75% of our borrowers are folks who could not qualify at other lenders due to their overlays or are folks who have recently gotten a mortgage loan denial by other lenders. Home Buyers who need to qualify for mortgage after loan modification, please contact us at The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at We are available 7 days a week, evenings, weekends, as well as holidays.

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