homepage logo

Restructuring your mortgage

By Staff | Sep 3, 2009


Mortgage modifications have been in place for many years, but new relief efforts have increased their use as an alternative to foreclosures, short sales, auctions and bankruptcy.

Often referred to as “mortgage workouts,” they are granted only with the approval of the existing lender and make permanent changes in an existing mortgage to make the terms more affordable to a homeowner.

A mortgage modification is a complex transaction, and there is great benefit in having someone to talk with and walk you through the process as you decide what information is required and what you don’t need.    

Premiere Mortgage has the knowledge and staff to assist you through each step of the way.

Some things to look for in a loan modification company: work with a reputable company that you know, preferably a local company.

The up front cost should be reasonable.

The money should go into a trust account until the modification is complete.

And make sure the loan modification company offers a money back guarantee, except for a nominal administrative cost

The workouts are often voluntary on the part of the lenders, although the U.S. Treasury has begun to urge greater modification efforts. The modifications are completed on a case-by-case basis and may not come with standardized procedures.

The modification strategy is designed to help homeowners who are having trouble paying their mortgage, and is not for those who are able to pay their mortgage or who may be eligible to refinance their existing loan.

Among modifications that may be considered are lowering the interest rate, or changing an adjustable-rate mortgage (ARM) to a 30-year fixed-rate mortgage.

Other modifications that could be explored include adding missed payments to the loan balance or extending the term of the loan. While less common, lenders may also reduce the principal or eliminate any second mortgages.

Deciding if a loan modification is your best option should involve a review of your overall situation and the terms of your current loan.

To determine if a loan modification is right for you, call Premiere Mortgage and talk with one of our knowledgeable staff or drop by our office for a free consultation.

Premiere Mortgage, with offices on Maui and Kauai, is an FHA-approved lender and offers extensive loan options through both broker and banking services. Tricia Morris may be reached on Maui in Kihei at 874-8800, Wailea at 891-8900, West Maui at 665-8800, on Kauai at (808) 822-2300 or toll-free at (800)-813-7711.