In the process of a loan modification, one of the last steps to get it approved is to go through a trial modification period. Lenders or banks institute a trial period so a borrower can prove that they will be able to keep paying their mortgage regularly. If the borrower completes the trial period successfully, the loan modification application is approved to be signed.  There are a lot of misconceptions about trial loan modification periods. Here are some myths and truths that we want to clarify.

Myths about Trial Loan Modification Periods

A Trial Payment Plan Means a Loan Modification will be approved.

Even if the borrower is on the right track with the trial period of the loan modification, it does not mean that it is already approved. The borrower still will be required to go through the whole period successfully to get a final offer from the lender or bank.

It is up to the Lender to make sure the Borrower Pays on Time.

You, the borrower, are the one requesting the loan modification, so it is your responsibility to make your payments on time. It is wise to make sure your trial payments have been received by your lender and applied to your account.

Once the Trial Payment Plan Ends, Borrowers Will Automatically get a Permanent Loan Modification

Nothing is automatic. It is essential that you follow-up on the status of the loan modification process with your lender. When the trial period is over, and all the payments have been received, borrowers need to call their lender and ask when the permanent agreement will be finalized. Double-check and follow up with the lender as much as possible to guarantee a quick resolution of the loan modification.

Lenders Will Instantly Apply Payments Once Received 

Some lenders can receive payments and not apply them instantly to the account. Sometimes, for whatever reason, payments get lost and are not received by the lender. It is vital to call the lender and make sure the payments are in the system and applied to the account.

Lenders Will Help You Complete the Trial Payment Period Successfully

The lenders can help you by providing information about the process. Still, they will not be able to assist you in understanding everything, and most times, the borrowers need to follow up frequently to get things done. 

Everything in the Permanent Loan Modification will  be the same as the Trial Loan 

A lot of things can change after the trial period, including payment amounts, payment periods, or interest rates. It is essential to check and understand everything in the offer once it is received: interest rates, terms, and conditions, time frames, payments, etc. An experienced lawyer’s review of the request could be of help.

Truths and Tips about Trial Loan Modification Periods

Keep Track of Everything and Be Organized

One of the critical aspects of the loan modification process is to be organized and have all of your paperwork on hand. Your lender could ask for proof of income from all sources, tax returns, current financial statements, etc. Keeping copies of bills, checks, money orders, mail tracking numbers, phone calls, letters, or any other essential documents could become helpful in the process.

Follow Up with Your Lender

Call regularly to make sure that everything is in order,  that payments arrived, and were applied to the account to make sure the trial payment plan is on track. You should have the names and contact information of everyone who is involved with your loan modification process.

Legal Mediation Will Speed the Process Up

The trial payment plan can happen faster if there is mediation involved. If there is a possibility for mediation, it is good to use since the lender will want to save money on attorney’s fees by speeding up the process.

Keep Mediation Open

Do not close mediation once the trial payment period begins. The mediation is an excellent way to confirm that payments were received and applied to the account, and it helps at the time of the final review of terms.

Grace Period Availability

If you have legal counseling, your attorney can communicate with the lender to negotiate a grace period.  If there is some circumstance which prevents you from making the payments on time, a legal mediation will help you secure the payments even if they are a little late. 

Ask an Experienced Attorney

Hiring an attorney can be helpful in applying for a loan modification. The experience and knowledge of an attorney can help you be organized and increase the possibilities of a loan modification being approved.

If you are struggling to make your house payments and you’re facing foreclosure, Debt Rescue Law can help you in applying for a loan modification. Call (833) 707-1234 for a free consultation.

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