A mortgage modification is requested by a mortgagor or borrower usually once they have fallen behind on mortgage payments or in danger of mortgage foreclosure proceedings. A successful modification generally takes 3-8 months to complete. A mortgage modification may include placing mortgage arrears, interest, delinquent taxes, and/or insurance in the principle balance.
Further, a mortgage modification may reduce the interest rate on the subject loan. Although a mortgage modification can lead to reduced monthly mortgage expenses, generally it results in the lengthened mortgage repayment term. Michael J. Leventhal has handled mortgage modifications for both residential and investment properties. Lastly, mortgage modifications are often granted during the course of Chapter 7 or Chapter 13 Bankruptcy Proceeding.
Prior to a mortgage foreclosure taking place, the mortgagee may be amenable to postponing a sale based on the reinstatement amount being repaid over a short period of time. The pre-foreclosure forbearance plan repayment is different than a modification in that it does not alter the overall terms of the loan. A pre-foreclosure forbearance plan is usually extended up to 6 months and requires that regular monthly mortgage payments plus the amount needed to cure all arrearages be paid within the time agreed upon.