What Should I Know About Mortgage Modifications?

 Posted on April 09, 2025 in Bankruptcy

If you are struggling to make your mortgage payments, there are legal avenues that can offer you relief. One such avenue is a loan modification. Successfully negotiating a loan modification with the owner of the loan can not only keep your home out of foreclosure–with all the peace of mind that brings–but also lessen your financial burden. Yet getting a loan modification is not a cut-and-dry process, nor is it certain that you will be granted one. If you are considering this, speak with an experienced Dallas, TX mortgage modification attorney to understand your options.

What Is a Loan Modification? 

When you receive a loan modification, the lender agrees to change the terms of the loan, usually by reducing monthly payments, lowering the interest rate, extending the term of the loan, or forgiving some of the principal you owe. Any late fees are usually added to the principal in a loan modification.

There are also certain government programs that facilitate loan modifications. You must apply for a loan modification, and will likely qualify if you have experienced a loss of income or some other negative financial event that has affected your ability to make loan payments. However, you must have sufficient income coming in to be able to make any modified loan payments.

What Are the Benefits of a Loan Modification?

Avoiding Foreclosure

The main benefit of a loan modification is that it avoids the lender foreclosing on your home, which can be one of the most stressful things that can happen to a person.

Lowering Monthly Payments and Interest

A loan modification means lower monthly payments and a more manageable loan. If your lender has also agreed to lower the interest rate on the loan, this can further reduce the financial burden.

Protecting Your Credit Score

By obtaining a loan modification you can save yourself from the negative effect that defaulting on your loan and having the bank foreclose on it can have on your credit.

What Are the Disadvantages of a Loan Modification?

While modifying the terms of your loan can benefit you, you may also experience some disadvantages, including:

• Lengthened Loan Term: Often, a loan modification extends the time you have to pay back the loan. While this can reduce the immediate financial impact, it can mean that you are on the hook for the mortgage for longer.

• Foreclosure Worries: If the foreclosure process already began when you started negotiating the loan modification, it does not automatically stop during negotiations. If you are not able to qualify for the loan modification in time, your home might still go through foreclosure.

Schedule a Free Consultation with a Dallas, TX Loan Modification Lawyer

If you are having a tough time making your mortgage payments, one option can be to seek a loan modification. The experienced Fort Worth, TX loan modification attorneys at Acker Warren P.C. can walk you through the process and advise on the terms of the modification. They can also offer alternatives if the loan modification does not work out. Contact our offices at 817-752-9033 for a complimentary consultation with our team.