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Discuss a mortgage loan modification with your lender

Whether you've fallen behind on your mortgage payments or foresee this happening in the future, it's critical to take immediate action to protect your home and legal rights.

Despite your financial frustrations, there are steps you can take to settle down your situation and save your home from repossession.

The most important thing to remember is that your lender is on your side. Sure, they want to receive payments based on the terms and conditions of your loan, but that doesn't mean they are eager to repossess your home if you fall behind. They'd much rather reach a mutually beneficial arrangement.

There are many types of mortgage loan modification, including the following:

  • Interest rate reduction: A lower interest rate will lower your monthly payment, which may make it more affordable to you. Your lender may agree to lower your interest rate temporarily or for the entirety of your loan.
  • Forbearance: This is a fancy word for reducing your payment, such as to help you financially during a hardship. For example, if your current monthly payment is $2,000, your lender could reduce it to $1,200 until your financial situation clears up.
  • Extending the term of your loan: By increasing the term, your monthly payment naturally gets smaller. And when that happens, it won't put nearly as much stress on your finances.
  • Repayment plan: You work with your lender to create a repayment plan that will eventually bring you current on all payments, interest and fees. This typically calls for an upfront payment to the lender, along with future payments until your account is once again current.

Your lender can't read your mind. If you're facing financial difficulties, you need to share this with them, as doing so provides the opportunity to discuss the many types of mortgage loan modification.

If you're unable to reach an agreement with your lender, turn your attention to a short sale. You may be able to sell your home for less than what you owe, with the lender writing off the remaining amount.

And if all else fails, look into the benefits of filing for bankruptcy. For example, the automatic stay will give you enough time to assess your situation and decide how to best deal with it.

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With offices in Toms River and Neptune, attorney William H. Oliver is ready to answer your questions and help you find the right debt relief solution. Evening and Saturday appointments are available. Call local: 732-988-1500 or fill out our contact form.

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609 Main Street
Toms River, NJ 08753

Fax: 732-775-7404
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Neptune, NJ 07753

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