Home Loans and Support

How long does a loan modification take?

While there is no set timeline when it comes to loan modifications the typical time it takes for a loan modification to process can vary greatly. Depending on your lender and ability to efficiently work through the process with them the whole process can take anywhere from 2 months to 2 years! Many people have been at the process for more than 5 months with no end in sight.

If you join our free forum here on Loansafe.org you will thousands of homeowners currently pursuing a modification and also hundreds of success stories that lay out examples of what lenders are currently offering. Here you will find all of the information you could possible need about this process and how to obtain this assistance on your own.

Adding to the time that it takes to get processed for a loan modification was the passing of a foreclosure prevention program that was designed to help the process but is actually making it take longer.  The Making Home Affordable program, commonly referred to as the Home Affordable Modification Program (HAMP) has made the entire process of applying for and receiving a loan modification that much more cumbersome. This new program just create more hoops for people in distress to jump through which will increase the amount one of time it takes to receive a loan modification.

For example to be eligible for the Home Affordable Modification Program you must have a stable job, or if you are on unemployment you must have proof that you will be receiving these benefits for at least nine months. However, many people that are seeking a loan modification are currently unemployed which makes that program that is designed to help them virtually useless, and for the people that do collect unemployment a majority do not receive their benefits for nine months.

Per this programs guidelines the borrower must go through a three month trial period prior to achieving permanent assistance. But due to the fact there are millions of people struggling to manage their mortgage payments, what was originally a three month trial has turned into a 6-10 month trial period. After the three months is complete the lender is suppose to once again review the borrowers situation to see if their financials have changed. This is where the program has failed. A majority of the lenders out there do a great job putting homeowners on this trial period, but once the period is complete they drag the process out saying it is still in review and later deny the homeowners for mistakes on their behalf. I cannot even begin to tell you how many times we this this event happen weekly.

Certain investors do not even allow loan modifications under the Home Affordable Modification Program which is another reason why this program is not as helpful as its originators would have liked. Investors can turn down these modifications as they please since they are not enforced to offer this assistance because its all just a set of guidelines provided by the government.

While there is no guaranteed guideline for how long it will take to receive a loan modification it appears as if the process can take anywhere from 2 months all the way up to 2 years.  Many people have been struggling with this process for more than a year and it can be quite stressful. The addition of this program that was designed to help speed the process and assist homeowners in distress has only complicated matters and made things worse. The program with its various rules and stipulations have only complicated things and made the process longer than it ought to be.

For those out there that do not want to jump through hoops going through this program I definitely suggest trying for a regular in-house loan modification. With a regular modification there is not nearly as many guidelines and the homeowner will not be required to go through the never ending trial period. Even investment properties and borrowers who are unemployed may be eligible for this assistance.

If you are currently involved with a loan modification or thinking about applying for one it is important that you realize upfront that this can be a very lengthy process. Many people come to find that this is one of the most stressful events that will take place in ones life. Not only does it take a very long time to complete the process but you will also have to call up on a weekly basis to get status on your case. We always suggest to try and deal with loss mitigation and not customer service or collections because they are very unprofessional and will most likely just waste your valuable time. In fact, calling these departments will probably land you oversees in India somewhere..

It is also important to know that there are a couple non-profit organizations out there that can assist you through this difficult process. Two non-profits we have found to be very reputable are HOPE NOW and Neighborhood Assistance Corporation of America (NACA). If you join our free forum, or already are a member, you will find that we have a NACA section in the forum that was made for homeowners specifically going through this process with them. We also have several NACA employees that have joined the forum to help people with any questions they may have.

You will need to display a lot of patience if you are going go through with a loan modification as the stressful process could take well over one year to complete!


About Moe Bedard

My name is Maurice Bedard, but most people call me Moe. I am the founder of America's #1 Mortgage Forum, LoanSafe.org, and also a website design firm called We Create Web Designs. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.

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