Question: Are the terms of a loan modification completely at the discretion of the lender or are there state or federal guidelines they must follow? Homeowners must become 90 days behind to get my mortgage company to consider modification. By this time, isn't my credit nearly as damaged as it would be with foreclosure?
Answer: Generally, the terms of a loan modification are considered a contractual matter between the borrower and the lender. However, depending on the specific situation, recent federal legislation may apply to certain modifications. To find out more about how the law applies to a specific situation, you may want to contact a HUD approved counselor or an attorney.
November 29, 2009
Legal Services Corporation