Unfortunate circumstances can affect any one at any time. A spouse losing their job, medical bills, divorce- all of these things can result in you defaulting on your mortgage loan. The foreclosure process is a frightening experience for anyone involved. Every state seems to have their own set of foreclosure timelines and statutes of limitations, so knowing exactly when the bank will take repossession of the home can be tricky.
Most banks will be more than happy to work with you before taking the final step in seeking authorization to remove you from your home. If you are faced with the prospect of foreclosure, a loan modification may be a way to get back on track and avoid losing your home. A loan modification is a permanent alteration to the terms of a loan. This is done so that a borrower’s loan can be reinstated at a rate that the borrower can afford.
If you have no intention on attempting to salvage your mortgage and are simply looking for a method to delay the foreclosure process, then a loan modification is not for you. During the modification process, the bank will require a copious amount of paperwork. While filling out this paperwork, the financial institution will request extensive personal and financial information. This will include collecting information regarding any assets, liabilities, and income. Such information can be used against you by your mortgage company when they pursue judgment in foreclosure court.
If you find yourself in an unlucky situation where you are unable to remain current on your mortgage, it is best to discuss your circumstances with a qualified attorney. They would be able to inform you of your options and ensure you are fully protected when attempting to modify the terms of your defaulting loan with your lender.