[Moe Bedard]

There seems to be a lot of talk but no concrete facts in regards to loan modifications. I wanted to post what a loan modification is and who is elligible for one.

A loan modification is when a lender modifies a borrowers current loan based on their ability to repay. These are used to mitigate loss and avoid foreclsoure in special situations.

Remember lenders are in the business of making money and not being nice. So when determining if you are elligible they look at several things. But the 2 most important factors are how much equity you have and your ability to repay.

If you have a lot of equity, then the lender is going to determine that it would be more beneficial to foreclose then to do a loan modification. If you have no equity then it makes sense for them to work with you and modify your loan.

It comes down to where the lender will lose the most.