Best Loan Modification Companies
You might be able to avoid foreclosure or bankruptcy with a loan modification. Generally, lenders only offer loan modifications to homeowners who are enduring a true financial hardship. If you’re struggling to make your monthly mortgage payments a loan modification can let you keep your home and get your payments on track.
Compare Top Loan Modification Companies
Read 4592 Reviews
This lender offers conventional, FHA, VA and jumbo loans along with fixed or adjustable rates. 580 minimum credit score required for FHA; 620 for VA and conventional. Fast, online application process with no additional fees.
Read 1360 Reviews
This online marketplace connects consumers with lenders. Credit score of 640-750 required. FHA, VA, USDA and Community Homebuyer loans require a minimum down payment of 0-10%; conventional loans require a 5-20% down payment.
|Carrington Mortgage Services|
Read 792 Reviews
Carrington Mortgage Services offers wholesale lending and mortgage services directly to consumers. These services include refinance and modification options, conventional loans, FHA loans, VA loans and more.
|Select Portfolio Servicing|
Read 609 Reviews
Founded in Salt Lake City in 1989, Select Portfolio Servicing, Inc. (SPS) is a mortgage servicer that specializes in single-family residential mortgages. SPS offers assistance with HAMP, HARP and other loan modification services.
|Specialized Loan Servicing|
Read 385 Reviews
This third-party mortgage servicer offers mortgage assistance programs including loan modification, forbearance plans, short sale, short pay and temporary payment suspension.
|Bayview Loan Servicing|
Read 190 Reviews
This national mortgage loan servicer offers loan modifications, forbearance plans, short sales, deed-in-lieus and foreclosure avoidance.
Read 132 Reviews
This division of a federally chartered savings association offers mortgage assistance and loan modification.
|Hope Now||Read 18 Reviews|
Hope Now is a support and guidance alliance between mortgage market participants like counselors, mortgage companies and others. Resources like modification scam alerts and counseling services help homeowners make smart decisions.
Read 31 Reviews
iFreedomDirect has been helping borrowers finance their homes since 1996. Specializing in FHA loans and loans for veterans, iFreedom Direct has headquarters in Salt Lake City with licensed loan officers operating nationwide.
|Peoples First Financial||Read 11 Reviews|
People’s First Financial is a full financial services firm that provides mortgage, real estate, financial and investment strategies. They specialize in loan modifications, VA loans and repayment plans among other services.
|Trinity Debt Management|
Read 11 Reviews
The Trinity Debt Management Program (DMP) helps consumers make informed financial decisions to take control of their repayment plans. The Trinity DMP reduces debts to one monthly payment, decreases interest rates and more.
Loan modification questions
What is a loan modification?
A loan modification is anything that changes the original terms of your loan. Unlike mortgage refinancing, which replaces your loan with a new mortgage, a loan modification simply changes the terms of your existing mortgage. Some ways your loan can be modified include:
- Principal reduction
- Postponing payments
- Extending your term’s length
- Lowering your loan’s interest rate
- Going from a variable interest rate to a fixed interest rate
Who qualifies for a loan modification?
Homeowners undergoing a severe financial hardship that puts them at risk of foreclosing on their house can qualify for a loan modification. Some instances of a severe financial hardship include losing a job, the death of a spouse or being diagnosed with a disability or illness that makes it difficult to repay your mortgage. Homeowners have to be delinquent for a certain amount of time, usually around 60 days, or they have to be a high risk for defaulting on their mortgage before a lender will modify their loan.
How does a loan modification work?
A loan modification doesn’t replace your existing loan with a new one, like a mortgage refinance. Instead, it changes the terms for your mortgage to make it more affordable for you. You can either get a lower interest rate, change the payment terms so you spread your payments out for longer, which will result in lower monthly payments, or switch from an adjustable rate to a fixed rate. You’ll need to work with your lender to see what options you qualify for and which one makes the most sense for you to allow you to stay current on your mortgage payments.
What is a hardship letter?
Loan modification will not be granted without a convincing letter of hardship from the applicant. This letter explains the applicant’s reasons for needing a loan modification. It should describe the specifics of the applicant’s financial situation and contain a few key elements:
- Identifying information. The first item of the hardship letter should be the applicant’s identifying information: name, address, phone number, email address and loan account number.
- Involuntary reductions of income. Any changes of income outside the applicant’s control—lay-offs, reduction of wages/hours, death of a borrower, disability, serious illness, divorce, etc.—are considered involuntary reductions of income. These should be listed and articulated clearly in the applicant’s hardship letter.
- Unavoidable expense increase. Unexpected medical expenses, damage from natural disasters, increases in property taxes or adjustable interest rates, unavoidable childcare expenses and other expenses that cause financial stress should appear in the hardship letter.
- Repayment plan and budget. Applicants should include a detailed plan for how the loan modification will help them. A proposed budget detailing plans for repayment as well as any mention of money currently set aside to pay to the lender as part of this plan. This information needs to be as comprehensive, specific and reasonable as possible. An accurate and clear payment plan increases the likelihood of approval.
Is loan modification worth it?
Loan modification helps homeowners lower their monthly mortgage payments. A loan modification can keep homeowners from defaulting on their loan and give them some breathing room to get back on track repaying their mortgage. It’s a more appealing alternative to foreclosure or bankruptcy and lets you stay in your home while you sort out your finances.
Types of loan modification
Flex Modification program
Fannie Mae and Freddie Mac implemented the Flex Modification program in 2017 to replace the HAMP loan modification program that expired at the end of 2018. These programs are designed to help homeowners who are more than 60 days delinquent on their mortgage payments to get some relief and avoid foreclosure or bankruptcy. Find out more about how to apply for Flex Modification if you have a Fannie Mae loan or Freddie Mac loan.
If you don’t qualify for loan modification, or if you just need short-term relief, you might qualify for a forbearance agreement. This isn’t a loan modification but rather an agreement between you and your lender that allows you to miss payments for an agreed-upon period of time. Because you'll still accrue interest, you should only consider this if you are in a short-term cash crunch and expect to be back on your feet relatively soon.
This also isn’t a loan modification but rather a plan you make with your lender to catch up on your missed payments. Your lender will spread out the amount you owe over a period of time. During that timeframe, the lender will add on the balance due to your existing mortgage payment. Usually repayment plans run around three to six months. At the end of it, you should be current on your mortgage.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.