Six Months After Trial Modification Loan

May 4, 2012 by  Filed under: Loans 

The trial modification process enables the borrower to understand how the process will work. It also assures the lender of the capability of the borrower to make adjustments according to the modification loan that is sanctioned. The trial period gives a chance to both parties to see whether this process will work for them or a foreclosure is a better option. Lenders allow 3 – 6 months for the trial period for the borrowers.

Review of the process and further actions that would be implemented

After the trial period is over, the lenders will assess the success / failure of the loan modification process. Lenders will assess the financial situation of the borrower and see whether the borrower is in the position to continue with the modified mortgage loan or not. In case of HAMP, if the borrower is able to make the mortgage payments, then the loan modification process will also be implemented after the trial period is over.

Lenders that aren’t part of the HAMP program may take a more time for the implementation process to happen. At the discretion of the lenders, the trial period can also be extended quite effectively.

If the borrower finds that they can continue to make payments towards the mortgage loan, then the loan is implemented permanently. In this case, the payments that have been made on the monthly basis are initiated as permanent. These will then become the payments that need to be made for the term period of the mortgage loan. Furthermore all debts should be paid off as soon as possible including any arrears or late fees that might be there.

Changing the mortgage loan again

If during the trial period, the borrower has successfully made the payments, then the terms and the conditions of the loan can be changed again. Often this can be better for the borrower. In many cases, the lender can lower the monthly payments, reduce the interest rate on the mortgage loan or even increase the tenure of the loan.


The loan modification process is extremely beneficial for the borrowers and the lenders. The borrower gets to keep their home and the lender will continue to get back the payments on the mortgage loan. Loan modification programs are relatively common as lenders seldom want to foreclose the property.

In many cases, the original debt balance can be significantly lowered with changes to the rate of interest or even the tenure period. Many types of loan modification programs are available. Lenders offer a trial period for the loan modification program to assess the success of such programs.

Julie Thompson, has been working on studying the foreclosures market, helping buyers on the finer points of Port Saint Lucie foreclosed homes.

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