"Mortgage loan modifications may use one or more of the following adjustments: Interest rate reduction, sometimes converting an adjustable-rate mortgage to a fixed-rate loan Loan term extension (for example, 30 → 40 years) to spread payments over a longer period Capitalizing arrearages by adding missed payments to the loan balance Principal forbearance or, less commonly, principal reduction"
"Have a documented, long term financial hardship that impacts your ability to pay Live in the home as your primary residence (in many programs) Have sufficient, stable income to support the modified payment Submit a complete and accurate loan modification application Meeting these criteria doesn't guarantee approval, but missing one often leads to denial. Lenders typically evaluate whether a borrower has experienced a long-term financial hardship that affects their ability to afford the original mortgage payment."
A mortgage loan modification permanently changes one or more mortgage terms to reduce monthly payments and help prevent foreclosure. Modifications can adjust interest rates (sometimes converting adjustable to fixed), extend loan terms, capitalize missed payments into the balance, or use principal forbearance or reduction. Approval depends on lender, investor, and borrower profile, so outcomes vary. Eligible borrowers generally must document a long-term financial hardship, occupy the property as a primary residence in many programs, demonstrate sufficient stable income to support the modified payment, and submit a complete and accurate application. Commonly reviewed hardships include job loss, medical issues, divorce, death of an earner, and disaster damage.
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