Factors Impacting Home Loan Modifications In Ohio
Loan modifications offer relief to homeowners who are facing financial hardship. For many, lower interest rates and loan term extensions can make loans more financially manageable. In Ohio, there are several factors that can influence the approval and terms of these modifications. In this article, the Columbus mortgage loan modification lawyers at Kohl & Cook Law Firm, LLC will discuss which factors impact your chances of approval.
Financial hardship
One factor influencing whether or not your mortgage loan modification will be approved is the borrower’s financial hardship. Lenders will assess the borrower’s ability to repay the loan based on their income, expenses, and assets. Major life events like job loss, medical crises, or divorce can contribute to financial hardship. Such realities could increase the likelihood of your mortgage loan modification being approved.
Documentation is necessary to show your financial hardship and ability to make the modified payments. Documents can include a hardship letter from the borrower and income verification paperwork including pay stubs and tax returns. Asset information and property documentation can also help.
Loan performance
Loan performance and the borrower’s payment history are important. Lenders generally prefer to work with borrowers who have a history of making on-time payments but are facing temporary financial challenges. Those who make late payments on a regular basis or who are in default may have a difficult time negotiating good modification terms.
Property value
In addition to other factors, the current market value of the property affects loan modifications. Lenders could be more willing to modify loans for properties that have some equity. In these cases, there is a lower risk of loss in the event of foreclosure. On the other hand, properties with declining values or underwater mortgages may be more difficult for lenders to approve.
Government programs
Some government programs offer incentives to lenders and servicers to help those who are requesting mortgage loan modifications. Programs such as the Home Affordable Modification Program and the Making Home Affordable initiative can be of great value to consumers.
Lender policies
Lender guidelines for mortgage loan modifications can vary significantly from lender to lender. Some lenders may be more proactive in offering modifications and may have established programs to help borrowers who are having difficulties making payments. Others could have stricter criteria or less incentive to modify loans.
Talk to a Dayton, OH Mortgage Loan Modification Attorney Today
The Dayton, OH mortgage loan modification attorneys at Kohl & Cook Law Firm, LLC represent the interests of homeowners facing foreclosure, or those who need to modify their mortgages. Call our office today to schedule an appointment, and we can begin discussing your next steps right away.
