Why Do Lenders Prefer a Loan Modification Over a Foreclosure?
Lenders are known to be difficult when it comes to loan modifications. But did you know that they benefit at least as much from the process as you do? The main reason they balk at Mortgage Modification is that they have to train agents to handle them, and each case requires individual attention. But it also saves them a good deal of time compared to foreclosure, and may even have a few long-term benefits. Here are some good reasons why your lender might prefer a loan modification over a foreclosure.
It’s faster and cheaper. In a foreclosure, there are specific wait times that allow the borrower to get current with their mortgage. It’s not uncommon for the process to drag on for almost a year. These delays can cost your lender a good deal of money. A loan modification, on the other hand, takes an average of 30 to 60 days. All they have to do is go over your documents, talk to your loan modification attorney, and see if you qualify. The negotiations are the hardest part, but they don’t cost quite as much as foreclosure expenses.
It’s less work. To start the foreclosure process, your lender will have to assess late charges, file a Notice of Default, pay heavy lawyer fees, and arrange an auction to sell your home. And if you manage to get back on track and stop foreclosure, all the work simply gets filed away. Loan modifications involve less work on their part. You and your Loan Modification Attorney will do most of the work and provide most of the documentation. Often, all they have to do is assess your case and decide what kind of mortgage assistance you will need.
