Mortgage Foreclosure & Refinance Resource

The FDIC gave the loan modification a nice marketing boost by sending out loan modification offers to 25,000 borrowers with IndyMac mortgages. That landed a lot of headlines and even more homeowners wondering where their good deal is.

Fortunately, this is not an original idea or reserved for banks in receivership. It is simply a negotiation between any borrower, with a hardship, and a lender to modify the terms of their mortgage loan.

Although certainly not streamlined or mainstream loan modifications are generally available to all borrowers in trouble. A loan modification, also known as a modified refinance, is simply a negotiation between a lender and a borrower that yields a restructuring of loan terms without refinancing. This often means a new payment and rate.

Many borrowers in need of a loan modification are finding it difficult to get started. Calling a lender directly can lead to confusion or loan officers attempting to refinance already troubled mortgages into worse.

There is a lot of pressure for banks to modify loan terms and keep borrowers in their home. Considering the current housing marketing and declining home values, lenders are often finding loan modifications more financially attractive than the expenses of foreclosure.

However, it seems that the key to borrower success is navigating the red tape and unfamiliar internal processes at banks and lenders–lenders that are performing large volumes of loan modifications for the first time.

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