Q. We recently accepted a loan modification agreement after twelve months of fighting with Chase Bank. They have always given us the run around and we were so far behind that foreclosure was almost definite. So therefore we accepted the modification even though it did not quite meet our standards and we feel we may go delinquent again in the near future.
Is it possible to obtain a second loan modification?
A.The answer to this question will vary for many borrowers due to the fact that servicers have their own internal guidelines and rules they abide by that are set forth in the contracts they have with lenders. It will also depend on the type of program you were approved for.
For example, if you just signed a loan modification agreement for the government’s Home Affordable Modification Program (HAMP) and the payment does not fit your budget, your servicer will not allow you to reapply for HAMP for another twelve months (again that will depend on the servicer’s guidelines).
However, even if you did just accept a HAMP modification you may still be eligible to apply for a traditional in-house modification. Most lenders have their own in-house programs they will review your account for if you do not qualify for HAMP. Keep in mind that there is no set rules or requirements for their in-house programs.
On the other hand, if you just signed an in-house modification agreement, than your servicer may allow you to apply for another one immediately. But some servicers will require you to wait up to twelve months after signing the agreement before you can apply for anther one. Remember most of these banks have their own set guidelines so the rules may vary as to whether or not you can obtain a second loan modification.
If you are considering accepting an agreement because you are afraid foreclosure may be in the near future, it would be wise to first contact your servicer to see if you will be able to apply for another modification within the twelve month time-frame. It would be a shame to go through all that hard work to achieve a loan modification just to end up in the same position immediately after accepting the agreement.