Do I Have To Be Late On Payments to Get A Loan Modification?

There has been a lot of talk about banks and private servicing companies requiring that you be late on your payments to be eligible for a loan modification. To clear up the confusion, let me just say that simply isn’t the case. There is one caveat to that, however.

President Obama has recently released an incentive for banks willing to help homeowners in need but not delinquent. This means that many homeowners will be able to obtain a loan modification even if they’re not late on their payments.

The real world scenario on that, however, is that many banks are still not complying, and even when they do, they are being very sparse on the amount that they will modify a payment.

Going late on your mortgage to obtain a loan modification is never recommended (or it shouldn’t be at least), but often times borrowers that are the most likely to default (i.e. those that are late already) get the attention of the banks more readily.