A loan modification company, also known as a mortgage modification company, is a business that helps homeowners in the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

modify the terms of their home

loans In finance, a loan is the tender of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money. The document evidencing the debt ( ...

mortgages A mortgage loan or simply mortgage (), in civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any pur ...

. When a mortgage is modified, the original terms of the home loan contract between a

lender A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...

and a

borrower A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of thi ...

are renegotiated and then altered, usually in the favor of the borrower. Many homeowners choose to obtain modifications to their home loans when they are struggling to pay their mortgages or hope to avoid

foreclosure Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has Default (finance), stopped making payments to the lender by forcing the sale of the asset used as the Collateral (finance), coll ...

. In order to expedite the loan modification process, homeowners may rely upon the services of a local loan modification company. By working with company that handles loan modifications, homeowners "receive the advice, resources and services they need to obtain the best terms possible for their modification while avoiding scams, which are prevalent in the loan modification industry."

Loan modification terms

Homeowners that successfully obtain loan modifications while working with a loan modification company may: * reduce interest rates * reduce principal * reduce penalties and late fees * increase the length of loan terms Additionally, homeowners who are facing foreclosure may be able to remain in possession of their homes if they work with their lenders to modify their mortgage. Loan modification can also make homeowners’ monthly loan payments more affordable.

Loan modification programs

Loan modification programs are offered by loan modification companies and can be helpful to homeowners who are struggling with making repayments on their mortgages. Many of these programs enable homeowners to pay zero advance fees, reduce monthly mortgage payments and stop foreclosure. Loan modification companies can also inform homeowners of federal programs, which may be advantageous. In the United States there are numerous federal loan modification programs that homeowners can partake in, like the FDIC Loan Modification Program. However, homeowners must meet government mandated eligibility requirements before they can enroll. The program offered by the FDIC has two main goals: # Determining a payment the borrower can afford. # Protecting investors’ interests. Another program is the Homeowner Affordability and Stability Plan (HASP). On February 18, 2009, President Barack Obama announced this $75 billion initiative, which has one aim, to make housing affordable for all U.S. residents. The HASP is a "comprehensive plan to help responsible homeowners avoid foreclosure by providing affordable and sustainable mortgage loans." As part of the HASP, there are 3 distinct programs depending on borrower needs:http://financialstability.gov Financial Stability Program *

Home Affordable Modification Program The Making Home Affordable program of the United States Treasury was launched in 2009 as part of the Troubled Asset Relief Program. The main activity under MHA is the Home Affordable Modification Program. Other programs under MHA include: * Princ ...

: HAMP * Home Affordable Refinance Program: HARP * Home Affordable Foreclosure Alternatives: HAFA

Loan modification software companies

Loan modification software companies have been developed in order to be able to handle the demand for proper analysis. Loan modification software companies have been developed both for existing loan modification companies and also as a do it yourself model. * Loan Modification Company Software: Software built for existing companies to help process paperwork and do analysis. These range from

customer relationship management Customer relationship management (CRM) is a strategic process that organizations use to manage, analyze, and improve their interactions with customers. By leveraging data-driven insights, CRM helps businesses optimize communication, enhance cus ...

(CRMs), to online portals and also internal analysis.

External links

{{Reflist Mortgage industry of the United States Mortgage Loans Personal finance