A loan modification document is created and signed by the involved parties because they need to make certain changes to the existing loan and their agreement. The document is normally made because the person who has borrowed the principal amount is unable to pay it in the decided timeframe and wants an extension. There could be different types of arrangements made to the primary loan agreement, such as:
● The borrower could ask for an amendment in the interest rate and lower them to suit their needs
● There could be a change in the type of loan altogether that would need a loan modification document
● They could also want to extend the timeframe for the loan repayment
● It could be a combination of some or all of the above
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The loan modification document is normally made with the help and assistance of an attorney or someone licensed to perform the deed. This is why working with us at PDX Signing will be helpful for the changes. Our team of professionals will assist you with all the necessary documents you need as a lender or a borrower to aid you with your modification process.
Ideally, the loan modification document in Portland, Beaverton, and Hillsboro is only made for those who are contractually obliged to fulfill their agreement and find themselves in a financial crisis, unable to do so. It is different from other agreements, such as the forbearance agreement, which is made to offer the borrower some relief for a short time period. This is a long-term arrangement made between the lender and borrower.
The reason behind why the lender would agree to this arrangement instead of a settlement procedure or a foreclosure case is because it could turn out to be a lot more expensive than the alternative. So, it would make more sense to make amendments to the existing loan agreement than to go ahead with any other form of settlement.
It also helps the borrower avoid foreclosure, especially when the loan agreement is a mortgage. There are requirements that the borrower has to fulfill to be eligible for the loan modification. Most lenders look at the following aspects of the borrower to understand whether or not it would
be viable for them to opt for the loan modification agreement:
● The first thing the lending party looks for is your financial standing and stability to confirm whether or not you would be able to repay your debt. This includes the monthly and annual income and the amount of money that still needs to be repaid.
● The lenders also check and verify what economic hardships you have been facing that are refraining you from paying back the loan. It needs to be an unavoidable circumstance to validate your loan modification requests, such as a job loss, divorce, and more.
The loan modification document is usually made when a large amount of debt needs to be repaid. If the pending loan amount is a small one, the lender will be less likely to agree to sign the document because it will mean that he will have to wait a lot longer to get the amount he is due, which eliminates the incentive on his end.
The borrower and the guarantor are the two parties who request the loan modification agreement, and the lender needs to set the modified terms of repayment and draft the agreement. Another thing that you as a borrower needs to make certain of to the lender is that they have no offsets, defenses or claims against the lender when the agreement is executed. Any and all prior claims or counterclaims that they may have had get waived once the loan modification document comes into effect.
Some of the documents that the lender and borrower are required to present for a loan
modification document in Loan Modification Portland, Loan Modification Hillsboro and Loan Modification Beaverton include the following:
● Tax returns of the borrower (for the last two years minimum)
● A profit and loss statement from the borrower
● An income and expenses report from the borrower
● Proof of additional sources of income of the borrower
● The borrower’s bank statements
● An affidavit stating the reasons why the borrower is unable to pay the required amount in
the specified time and the reasons behind requesting the loan modification
The loan modification document is made with help of attorney or who is licensed to perform deed
Usually you can use the loan modification process when the loan amount is large to be repaid.
Not Everyone who’s facing mortgage payment qualifies for a loan modification. Those who are homeowners facing huge default can go for a loan modification.
