Types of Mortgage Modifications in Illinois

Attorneys for Modifying Home Loans in Lake County, IL

A mortgage loan modification can help you stay in your home and avoid foreclosure by restructuring the terms of your existing mortgage. The result is typically a lower, more manageable monthly payment. While a mortgage loan modification might be helpful to you as a borrower, your lender will generally benefit from the arrangement as well. At Newland & Newland, LLP, we can help you negotiate a mortgage loan modification that meets your needs and prevents the lender from taking undue advantage of the situation.

Our attorneys have more than 60 years of combined experience, and we have been serving clients in Lake County and Northern Illinois for nearly three decades. We have helped many individuals and families avoid foreclosure and remain in their homes through creative mortgage loan modifications. Let us put our experience and knowledge to work for you and your family.

Common Types of Modifications

At Newland & Newland, LLP, we will begin with a thorough review of your financial situation, including the terms of your mortgage and the details of your delinquency. We will help you understand why you fell behind and look for ways to improve your circumstances. Depending on your needs, we will then negotiate with your lender on your behalf to get you the modification that best fits your situation. You may qualify for:

• Forbearance: A forbearance is the temporary reduction or suspension of your monthly payments. During a forbearance, interest will generally still accrue but you might not be required to make interest payments until the forbearance expires. The principal that was in forbearance must be paid at the end of the loan term or before the property can be sold.
• Capitalization of Arrears: If you are behind on your mortgage payments, you are considered delinquent and the amount you are behind is called "arrears." Your lender may be willing to roll your arrears into the loan's principal, which will bring you current on your payments. The term of your loan may need to be extended or the amount of the monthly payment may be increased to account for the larger principal;
• Interest Rate Adjustment: If your lender agrees to reduce your interest rate temporarily, your monthly payments could become more affordable in the short term. When the rate reduction period expires, however, your monthly payments will go back up so you need to plan for that reality. A permanent rate reduction may also be possible if your financial situation is unlikely to improve in the future.
• Term Extension: A term extension can lower your payments by increasing the number of payments that you will make over the life of the loan. For example, if you still have 15 years left on your mortgage and you owe $100,000, your lender may agree to extend your term for an additional five years. You will pay more in interest but your payments will be lower and you can remain in your home.
• Partial Claim: If your loan is insured by the Federal Housing Administration (FHA), and you are at least four months behind on your home loan, you may be eligible for a partial claim modification. If approved, your missed payments and any owed fees will be rolled into a second mortgage at zero percent interest and would be due upon refinancing or when the property is sold.
• Repayment Plan: Instead of modifying the terms or the structure of the mortgage, you may be able to reach a repayment agreement with your lender. You may need to make an upfront payment and increased monthly payments until your past due payments are resolved.

Contact a Qualified Mortgage Modification Lawyer

Before you agree to a loan modification with your lender, you should speak with an experienced attorney about the advantages and potential drawbacks of the proposed deal. Our team may be able to negotiate more favorable terms than those contained in the lender's initial offer.

To learn more or to get started, contact our office. Call 847-549-0000 for a free phone consultation at any of our five convenient locations. Newland & Newland, LLP serves clients in Libertyville, Gurnee, Mundelein, Grayslake, Vernon Hills, Arlington Heights, Lake County, and the surrounding communities.