The Loan Modification option provides either a permanent or temporary change in one or more of the terms of a mortgagor’s loan, which allows a loan to be reinstated and results in a payment the mortgagor can afford.

Loan Modification Facts

• A permanent change in the interest rate.
• All Loan Modifications must result in a fixed rate loan.
• The Loan Modification must fully reinstate the loan.
• Subsequent defaults are to be treated as a new default.
• Capitalization of delinquent principal, interest or escrow items. Possible extension of loan term.
• All or a portion of the PITI arrearage (Principal, Interest and Escrow Items) may be capitalized to the mortgage balance.
• When establishing a loan modification, it is acceptable for mortgagees to include all payments due including an additional month.
• Late fees associated with the current default episode should be waived.
• No administrative fees for completing the Loan Modification documents can be passed on to the mortgagor.
• The modified principal balance may exceed the principal balance at origination.
• The modified principal balance may exceed 100% lue.
• Mortgagees may re-amortize the total unpaid amount due over the remaining term of the mortgage, or may extend the term not more than 10 years beyond the original maturity date or 360 months from the due date of the first installment required under the modified mortgage, whichever is less.