Loan Modification - Title I Property Improvement Program

Sphere: Related Content About loan modifications as found on the HUD website:

The intent of a loan modification is to eliminate the arrearage and to reduce the monthly payment (by lowering the interest rate for the remaining term) which will allow the Title I loan to be brought current before or by the end of the loan term. Homeowners may be considered for a loan modification if they have recently experienced (1) an involuntary reduction in income or an unexpected increase in living expenses and (2) the lender determines the borrower has a reasonable ability to pay under the terms of the loan modification plan to eliminate the arrearage.

As loan modifications do not make sense in every situation, lenders should carefully review each borrower to determine if this option is viable. Loan modifications are most advantageous when implemented during periods of low interest rates and when the stability of the mortgage can be enhanced by modifying the debt over the remaining term. The original principal balance, interest rate and term may not be exceeded in any modification agreement.

Lenders may enter into these loan modifications without HUD’s permission and they do not have to be recorded.