A loan modification is defined as “the modification of an existing loan agreement between a borrower and a lender, whereby the lender agrees to either; lower the payment amounts by spreading the loan over a longer term, lowering the APR (annual percentage rate – interest), combining the loan with other loans in a debt consolidation loan. Sometimes all three of these modification scenarios are made on the note(s).
Loan modifications are generally carried out with borrowers who have mortgages that they are defaulting on, or will soon be defaulting on. However, mortgages is not the only loan product that can be modified. Many borrowers do not understand that loan modifications can be applied to any type of loan
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