The lender does NOT lower your principal balance unless you negotiate it. You have to have an understanding of your credit history before agreeing to a loan modification.
Is the lender losing any money?
The Reality of Loan ModificationCourtesy EzineArticles: Home Equity Loans Tue, 11/18/2008 - 13:20
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Loan modification is a
Loan modification is a process whereby a home owner's mortgage is modified and both the lender and homeowner are bound by the new terms of the new mortgage. The most common loan modifications are listed below:
lowering the mortgage interest rate
reducing the mortgage principal balance
fixing adjustable interest rates within the mortgage
increasing the loan term throughout the mortgage
forgiveness of payment defaults and fees
or any combination of the above
A loan modification is a permanent change in one or more of the terms of a mortgagor's loan, it allows the mortgage loan to be reinstated and results in a payment the mortgagor can afford.
Check out our Public site at http://LOANMODIFICATIONMORTGAGE.ORG
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