Posted On: December 13, 2010

Mortgage Modification and Bankruptcy

A Sacramento bankruptcy attorney comments on mortgage modifications and bankruptcy.

When a person is having trouble paying their monthly mortgage payment, there is one option called modification. There are three areas that can be modified:
- Interest
- Principal
- Term

A modification can be one of the above or a combination of all the above factors. In some cases the lender will allow you to skip a few payments and add them to the back end of your loan. This really wouldn't be considered a modification.

A true modification is where a new agreement overrides the original agreement. This will allow you to keep your home and hopefully keep from filing bankruptcy. You are seeing some lenders taking 30 year mortgages and extending them out to 50 years. This lowers your monthly payment, but increases the interest you pay on the home. The hope in this case is that the real estate market recovers and you can sell your home well before the 50 year period is up.

When doing a mortgage modification be cautious of large upfront fees. A legitimate company may ask for a small processing fee, but a lot of the fees can be built into the new loan agreement. It's a good idea to ask your lender who they recommend and go from there.

Please do not hesitate to contact us at our Sacramento office by calling 916.792.6025 or for your debt resolution needs. You can receive a free consultation over the phone, or request a free in person appointment at a Bankruptcy Law Firm office nearest you. Please visit our website at and fill out a free online evaluation form to determine if you are a qualified candidate for bankruptcy. Bankruptcy Law Firm's team of bankruptcy lawyers, bankruptcy client care specialists and bankruptcy staff at Sacramento can assist you with all aspects of your bankruptcy case. We at Bankruptcy Law Firm can assist you regarding filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. and we are happy to help! Our bankruptcy attorneys located throughout California and Oregon can assist you with your bankruptcy questions.

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