Who is Eligible for a Mortgage Loan Modification?

Providing a standard answer to the question “who is eligible for a mortgage loan modification” is difficult.  Every lender will have their own policies and procedures that will affect a person’s ability to secure a home loan modification.  Different lenders have different eligibility requirements, but every borrower with an active loan is able to submit a request to be considered for loan modification.  A loan modification request is nothing more than a request to have the terms of the original mortgage contract changed to make monthly payments more affordable for the borrower.  To put it simply: anyone can ask for a modification, but not everyone will be approved.    There are no penalties for requesting a loan modification, and there are no penalties for being denied for a loan modification, so anyone experiencing a financial hardship is urged to apply for a modification in order to avoid a future foreclosure.


Those who do not meet established eligibility requirements may still be able to convince their lender that a loan modification is best for all parties, but doing so will not be easy.  Borrowers should contact their lenders to determine the minimum eligibility requirements needed to be considered for a successful loan modification, and should contact an attorney if they do not meet the minimum requirements but still want to be considered for a modification.  Borrowers must realize that their debt is relative to their ability to pay it.  This means that just because a lender says that not enough debt exists to be considered for a modification, it does not mean that a borrower isn’t struggling to make payments.  No person who is struggling to make their monthly payments on time should ever think that applying for a home loan modification is a waste of time.  Failing to request a home loan modification is the best way to guarantee that one will not be issued.  Historically, those who request home loan modifications have a higher modification approval rate than those who don’t.


The thing to remember about eligibility requirements is that they often are not set in stone.  A mortgage contract is just like any other contract, it can be renegotiated at any time if both parties agree to a renegotiation.  The trick is to just find the person high enough in the pecking order with the authority to make exceptions to company policy.  This is where a lawyer will come in handy.  Many lenders know that it is easier to refuse the requests of a borrower than the requests of the borrower’s attorney.  Borrowers shouldn’t take this personally, it is just a tactic used by lenders to keep their pockets lined with as much cash as possible.  Lenders know that most borrowers lack the legal knowledge to truly stand up for themselves, and lenders have no problem taking advantage of that lack of knowledge if it means a few extra dollars every month.


No matter what the eligibility requirements of a loan modification are, a hardship is a hardship.  If it is difficult for a borrower to make their monthly payments, they should request a modification, plain and simple.  Go through an attorney to minimize the risk of rejection from the beginning, as this is often cheaper than hiring one after a rejection has been issued.