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For some homeowners who are facing foreclosure, a mortgage modification is a possible way to stop the foreclosure. Because these loan modifications can be complex, having someone familiar with them by your side as you go through the process is vital. For Florida homeowners who are considering mortgage modifications, knowing some basic information might help them to make a decision about how suitable this program is for their case.

Are there financial guidelines for a mortgage modification?

Yes, there are some eligibility requirements for mortgage modifications. One is that there must a verifiable increase in living expenses or loss of income. You must have a minimum of 15 percent of your income as surplus income. That surplus income has to be at least $300. Your income has to be continuous income if you plan on using mortgage modification to stop foreclosure.

How often can my loan be modified?

You can only have a loan modification once every 24 months. When the loan is modified, the interest rate is also modified and the total amount due is re-amortized over a 360-month period. As part of the mortgage modification, the lender waives all accrued late fees. Also, the lender can add in the foreclosure costs and legal fees into the mortgage modification.

What else does the lender have to do?

The lender can opt to inspect your home as part of the mortgage modification process. The lender will also analyze the escrow.

Mortgage modification is only one option to stop foreclosure. It is vital that you check into this option, as well as other options like bankruptcy, as soon as you discover that you are facing foreclosure.

Source: U.S. Department of Housing and Urban Development, “Loan Modification Frequently Asked Questions” Sep. 29, 2014