What is mortgage modification and why is it important?
Home sales brokers and real estate investors are exchanging with investors being filing cash at the agent's hand.

What is mortgage modification and why is it important?

The prospect of losing your home because you can’t make your mortgage payments can be scary. Maybe you’re having trouble making ends meet because you or a family member lost a job, or you’re experiencing other financial problems. 

Your financial situation can go through its ups and downs, and there could be a time when you start to fall behind on your monthly mortgage payments or struggle to keep up. In this situation, a home loan modification can provide a practical solution. This article will describe mortgage modification and outline the benefits of this method for your finances.

What is a mortgage modification?

Mortgage modification is a legal technique to create a permanent alteration to some of the terms and conditions of your existing mortgage agreement due to a change in financial situation. With a home loan modification, you can lower your monthly payments by eliminating the late fee, lowering your interest rate, increasing your total repayment period, and reducing your principal balance. A loan modification aims to provide homeowners with a viable solution to their payment challenges. 

However, achieving a favorable mortgage modification is not always straightforward. The correct approach is to retain the services of a competent loan modification attorney to represent you rather than going through the process on your own. 

Benefits of Mortgage Loan Modification in Florida

In a mortgage modification, your lender agrees to modify some aspects of your mortgage loan. Banks have been granting reasonable modification requests to help Florida homeowners avoid foreclosure. You can expect the following benefits: 

  • Reduce your monthly payments 
  • Lower the interest rate on your loan 
  • Reduce the principal amount of the loan 
  • Forgive fines and surcharges 
  • Shift arrears to the end of the refund
  • Temporarily suspend your mortgage payments
  • Extend the overall term of the loan  

Additionally, an experienced Florida mortgage modification attorney can help you develop some more creative solutions to ensure you can keep your property or give it away in the most cost-effective way possible. 

Florida Mortgage Modification Program

The mortgage modification program in Florida involves an informal mediation process that you can do at your attorney’s office. Your attorney and the mortgage lender will choose a mediator. The role of the mediator is to facilitate an agreement between you and the lender, but the mediator cannot force the lender to modify the mortgage. Florida’s mortgage modification program is very successful and allows borrowers to lower their monthly payments and keep their homes.

How to qualify for the mortgage modification program

Here are some requirements to qualify for a loan modification program in Florida: 

  • The debtor must be in bankruptcy.
  • The borrower must have a regular income, but a change in financial circumstances may have made it challenging to keep their mortgage payments on time. 
  • The program only applies to the primary residence of the debtor. Investment properties or second homes do not qualify. 

Specific other qualifications may also apply. An experienced foreclosure attorney can help you determine if you meet all the Florida mortgage modification program criteria.