Once you’ve filed all the paperwork for a mortgage loan modification, proven your eligibility and come to a mutually agreed-upon deal with your lender and/or the United States government, you will be entered into a loan modification trial period. This is a period of 3-6 months following your loan modification in which the new terms of your loan are “tried out” to see if they will work for the bank and for you.
What Is A Loan Modification Trial Period
A loan modification trial period is kind of like probation. It is designed to see if you can be trusted to uphold your new mortgage agreement. The contract is written such that it is easier for the bank to scrap the entire agreement if you do not come through, making it particularly important that you mind your P’s and Q’s and fulfill all of the new requirements. If you do not do so, the bank is well within its rights to foreclose upon your house. Loan modification is seen as the last resort for mortgaged homeowners, and if you do not take the new terms seriously, the bank will no longer take you seriously as a mortgage payer.
Loan modification trials are required by most consumer lending agencies as well as federal programs before you can get your loan terms changed permanently. Once the trial period is up, you will be able to sign up for a more permanent, binding agreement for both yourself and for the bank.
How To Keep From Losing Your House
You should never sign any agreement for a modification trial agreement if you believe that you will be unable to meet its payment requirements. Generally speaking, the only requirement for most loan modification trials is that you make your payments on time and in full. If you can do this, you will have nothing to worry about. However, if you signed the paperwork without being sure, then you may be in trouble.
You should always talk to a loan modification lawyer before signing any major paperwork with your bank. A lawyer will look out for your best interests and make sure that you don’t sign your life away. An unscrupulous lender may want you to sign a loan modification agreement that they know you can’t pay and convince you that you will be able to pay it. If your trial period fails, the bank may have an easier time foreclosing on your house because they have documentation “proving” that you are an untrustworthy creditor. Call a loan modification attorney today!