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Loan Modifications

If you’re facing a long-term hardship, we can review you for a permanent loan modification to determine if more manageable terms are available.

While refinancing means replacing your existing loan with a new one, a loan modification keeps your existing loan and changes its terms.  Changes may include a rate reduction, a possible term extension and in some cases principal “forgiveness or deferment”.  

A loan modification (also called a “mod” or a “workout”) changes the original terms of your mortgage loan, such as your payment amount, the length of your loan term, and your interest rate. Once approved for a modification, it typically starts with a brief trial-payment plan before permanently modifying your mortgage—to make sure you can afford the modified payment.

A loan modification can provide you with practical benefits, including:

  • Reducing your mortgage payment to a more affordable amount.

  • Doing less damage to your credit score than a foreclosure.

  • Staying in your home and avoiding foreclosure.

Specific eligibility requirements may vary depending on the loan’s investor or other factors such as affordability and one’s ability to repay the proposed modified terms.

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Forbearance Plans & Extensions

Under a forbearance plan, the loan’s investor will suspend or reduce your regular mortgage payments for a specific period of time (usually for several months). After the forbearance period, the total unpaid amount is DUE. Your post-forbearance payment options may include:

  • Deferment, where your outstanding payments are moved to the end of your loan term (the most common option).

  • Loan modification, which changes the terms of your mortgage to bring your account current with a new, more affordable regular payment.

  • Repayment, which spreads your past-due amount over a set period of time and adds an extra amount to your regular mortgage payment until you pay back the past-due amount in full.

  • Reinstatement, where you repay everything past due in one lump sum to immediately bring your account current.

Your Home Retention Specialist will work with you to decide which post-forbearance payment option best meets your needs.

A forbearance plan offers you significant benefits, including:

  • Giving you time to address your financial challenges and get back on your feet.

  • Doing less damage to your credit score than a foreclosure.

  • Staying in your home and avoiding foreclosure.

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Repayment Plans

If you can afford it, a repayment plan offers several benefits:

  • Enables you to resolve your delinquency.

  • Permits you to spread your past-due payments over time. Generally over 3-6 months.

  • Does less damage to your credit score than a foreclosure.

  • Avoids the expense and inconvenience of foreclosure.

  • Enables you to stay in your home.


Under a repayment plan, the borrower agrees to pay your past-due amount over time. Payments are typically divided up and spread out over a certain number of months or years depending on the loan's investor. A portion of that total amount is then added  to your regular mortgage payment. This will increase the amount of your payment during the repayment period. When you finish your repayment plan, your mortgage is considered current, and your payment reverts to its previous amount.

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Short Sale

If there isn’t a financially feasible way for you to keep your home and your property lacks the equity for a “Conventional Sale”, a short sale is an option that can give you a fresh start and avoid the foreclosure process.
A short sale can allow you to sell your home for less than you owe on the mortgage, pending investor approval.
If you want to pursue a short sale, please assure that you’ve exhausted all potential home retention option available including filing for relief under a bankruptcy.

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Short Payoffs - Settlements

How Do Short Payoffs Work?

A "short payoff" is essentially a “settlement” or when the Mortgage Servicer / Loan Investor agrees to accept less than the lien / mortgage's full balance as payment in full for the debt. This typically applies to second mortgage liens or HELOCS (Home Equity Line of Credit).

General eligibility requirements for a short payoffs:

  • The borrower must demonstrate the ability to pay off the debt. “Proof of Funds” have to be provided via bank statements, or other savings account statements to show the money is “liquid” and can cover the proposed “settlement” or “short payoff” amount.  

  • In most cases the second lien isn’t covered by the collateral or (equity) of the home. Meaning, both the first and second lien payoffs amount to more than the property is valued or appraised for. That leaves the second lien position “under water” or short of its valued collateral (property).

  • the borrower must have a steady income and good credit.


A short payoff can be a good option when:

  • The market value of the home has depreciated and dropped significantly

(Like that of the Real Estate Crash in 2008)

  • The homeowner can afford to make a “lump sum payment” to settle the account

  • The homeowner wants to move away from the property, and

  • the homeowner doesn't have the ability to pay a large amount of money to cover the deficiency between the sales price and the total debt.


Pros and Cons of a Short Payoff

A short payoff allows borrowers to rid themselves of the 2nd lien / mortgage or the actual home with little damage to their credit score. The downside to short payoffs is that not all lenders are open to the idea, and they can be difficult to negotiate. And, again, you might be liable to pay taxes on any forgiven amount and be sent a 1099C for the “cancellation of debt”. Please consult a licensed CPA or Tax Preparer for more information on tax consequences due to a “settlement” or “short payoff”.

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Qualified Loan Assumptions

An assumable mortgage allows a buyer or borrower to take over the seller’s mortgage. Once the assumption is complete, you take over the payments on a monthly basis as scheduled per the original Note, and the person you assume the loan from is released from any further liability.

If you assume someone’s mortgage, you’re agreeing to take on their debt. Assumable mortgages are most common when the terms currently available to a buyer are less attractive than those previously given to the seller. Assumable mortgages also factor into divorce scenarios when the spouse who gets the house is on the title, but not initially on the loan, for example. 

QLA is a loan approval process similar in nature to purchasing or refinancing, which involves income and credit as qualifying factors. 

NOTE: Not all loan programs are assumable. For more information please contact your loan servicer to determine if you have an "assumable loan"

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Deed-in-Lieu

Under a deed-in-lieu-of-foreclosure plan (often called “deed-in-lieu” or “mortgage release”), you find another place to live—and you sign over the possession of your property to the company that owns your mortgage aka your (Loan Investor). In return, your mortgage owner releases you from your loan obligation. The benefits of a deed-in-lieu program include:

  • Eliminating your mortgage debt.

  • Receiving financial aid to help pay your relocation expenses “Relocation Assistance” or “Cash for Keys” (not available in every situation).

  • Doing less damage to your credit score than a foreclosure.

  • Avoiding foreclosure.