Golden State Financial Group Explains the Difference between Loan Modification and Loan Reinstatement

If you have received a letter from your mortgage provider that you must make  Almost Famous, as well as legal fees, penalties, and late fees comma then they are telling you that they wish to reinstate your loan. Essentially, it means that the delinquent amounts have been a default on your part. When this happens, they are entitled to demand that you make payments and if you don’t, they will foreclosure property. In that case, you may wish to consider a home loan modification because this could help you avoid foreclosure. Here, the Golden State Financial Group will explain how reinstatement and modification are two very different things.

Golden State Financial Group on Reinstatement and Modification

When you receive a letter demanding payment, the content of this letter will vary depending on the terms of your loan. The only thing it can demand is that you pay what is stated in your original loan documents. If you have fallen behind, you must still meet all the terms and conditions stipulated in your contract. No loan document and has any language in it that allows for changes. What this means is that the lender can only collect on your loan or foreclose. Hence, if you have defaulted, the only way to once again be current is to make full payment. Once this is done, your loan will be reinstated and you will not lose your property, presuming you will not default again.

Sometimes, reinstating a loan is almost impossible  simply because of the huge amount due, particularly when adding all the fees. What this means is that you may feel as if foreclosure is the only option left. However, Linda’s May in this case agree to effectively change the language found in your original loan contract. This means they modify it. How they modify it varies comma and could be something like lowering your monthly payments, slightly increasing your monthly payments until you have paid what is due, lowering your interest rates, saving money, or even gifting some of the remaining balance to you.

You may wonder why a lender would be interested in making things easy for you particularly when you are the one who has defaulted. There are actually several reasons for this, including:

The foreclosure process is incredibly expensive for the lender.

It is unlikely that the lender will be able to receive the full value outstanding on your loan by selling your property.

Well the home is in the selling process it will need to be looked after. It is unlikely that you will be willing to do this when you know your home it’s been taken off you.

Lenders don’t actually have their own money, they borrow it from larger lenders. This means that they have money to pay back and they might not be able to do so when they for closing your property.

While in foreclosure, your home is not classed as an asset. This will lead to heavy criticism from government regulators.