Wells Fargo Mortgage Loan Modification
Wells Fargo Mortgage Loan Modification
Wells Fargo Mortgage Loan ModificationWhen a foreclosure occurs it is not pleasing for borrowers, nor is it desirable for lenders due to the huge losses they incur as a result. Lenders may claim their lost loan amount through a foreclosure; however, they may incur losses in the form of foreclosure proceedings. This shows that lenders despise foreclosures as much as borrowers do.
Therefore, rather than applying for foreclosure, the lenders prefer to modify the mortgage so that the borrowers are able to repay the loan installments. It is also a better option for borrowers as it typically reduces the loan amount due to the decrease in the interest rate or increase in the term of the loan.
Loan modification is offered by most lenders and Wells Fargo also offers loan modification on mortgages. When compared to other lenders in this regard, Wells Fargo mortgage loan modification is considered very rational to deal with.
The process usually entails a three to 5 month trial period for the borrower where the monthly payment is reduced depending on the monthly income and expenditures of the borrower. While in the trial period, the borrower is required to make timely payments, usually on the first of every month. The rules are stricter during the trial period and the lender may not accept the payment even if it is made within the grace period.
After the completion of the trial period, it will review your case for Wells Fargo mortgage loan modification. However, there is no assurance that the loan modification will be approved even if the trial period requirements are met and the installments are paid on time.
Once the loan modification is approved, the borrower receives the approval letter for loan modification and the new terms of the loan are defined and provided in a document. The lender may also agree to increase your term of the loan reducing your monthly payment which means that the loan repayment period is extended to say 40 years. However this significantly increases the overall loan amount paid by the lender.
Sometimes, even after the loan modification documents are filled out and submitted, Wells Fargo may not process the loan modification application which suggests that the final settlement of loan modification is not made. This is because of the huge number of people applying for loan modification at Wells Fargo every day.
Therefore, if you intend to get Wells Fargo mortgage loan modification, it is important that you provide all the necessary documents and brace yourself for the stressful process of getting your application approved.