New Jersey consumers learn more about mortgage loan modifications

May 17, 2013 (Press-News.org) New Jersey homeowners who are having a hard time financially have been finding it hard to make their monthly mortgage payments in a timely fashion. Accordingly, some have been searching for ways to help their situation by considering the possibility of having their mortgage loan modified.

However, according to the State of New Jersey Department of Banking and Insurance, consumers should beware of certain businesses that are offering mortgage loan modifications, ways to prevent foreclosure and loss mitigation consultations. These types of companies are claiming to help homeowners with resolving their overdue mortgage debt, but they will only do so for a certain amount of money that must be paid up front.

Mortgage loan modifications

Those who own a home generally want to ensure that they have considered all their options in an effort to keep their home during financial hard times. The thought of filing for bankruptcy protection might come up; however, there might be an alternative way to save one's home from possible foreclosure proceedings -- seeking a loan modification.

A loan modification can be done if the borrower and the company holding the loan can agree to permanently alter certain terms of the mortgage contract in order to make the monthly payments more manageable. For example, homeowners can seek to lower their interest rate, add missed payments to the balance of the loan or extend the terms of the loan.

What a loan modification can do

Mortgage loan modifications can be very beneficial for homeowners, particularly those who are facing long-term changes to their income. Some of those benefits include:
- Possibly changing the loan's annual percentage rate from variable to fixed.
- Potentially lowering the entire amount of the mortgage.
- Ultimately saving the home from foreclosure due to an inability to pay.

Consumers should take note that loan modifications are not the same as mortgage refinancing options. Instead, they are more of a type of debt adjustment.

The New Jersey Department of Banking and Insurance further advises homeowners and consumers by providing information about what kinds of businesses can participate in loan modifications that involve the adjustment of debt. Those businesses include mortgage servicing companies that are agents for the owner of the home loan, the actual owner of the home loan, any business that is a licensed debt adjuster and certain other business entities.

Individuals who are looking for someone to help them get a handle on their mortgage payments might want to consider seeking the services of a skilled mortgage modification attorney who can inform them of all their options and protect their rights.

Article provided by Law Offices of Phillip F. Drinkwater III
Visit us at www.pfdlaw.com