subject: How Trial Loan Modification Plans Work [print this page] Do you want to end your mortgage problems by applying for loan modification? The first thing you need to do is to know the concept of trial period. During this period, the lender will assess your payment performance to see if you can adequately handle permanent modification.
The trial modification begins with a series of several trial payments. After the terms of your loan have been modified, the trial payments will be set in place. Just like regular payments, the trial payments are due on a monthly basis. In fact, these dues would be similar to the payments that you have to make for a permanent loan modification. But because you have modified the loan, the trial payments are lower compared to the monthly payments of your original mortgage.
Usually, the trial period for loan modification will last for three months. The three-month window would be enough to determine if the loan modification will work for you.
Things to Look For During the Trial Period
The main objective of trial modification is to concretely evaluate the capacity of the borrower to handle the modified loan. You need to go through the trial process before your modification becomes permanent. The trial is actually a safeguard for the lender. You have to understand that lenders want to see if you can pay the modified loan. You can not expect a lender to hand out a modified mortgage loan to people who can not handle it properly. So the trial period serves as a guarantee of your good faith.
Once you completed the trial period, the terms of your loan modification will become permanent. The trial period ends after you complete the payments for the usual 3-moth window. This means that you can handle the new terms of you loan.
The big problem now is that some lenders are not following the set standards for trial loan modification. This kind of problem is increasing over the years so you need to watch out for improper implementation of the trial period.
There are lenders who are notorious for not converting the trial modification into permanent loan modification. If this happens to you, the first thing you need to do is to inquire why your modification has not been made permanent. This is particularly important especially if you have completed all the trial payments.
Another option available for you is to seek the help of a loan modification specialist. In most cases, the specialist would be in the best position to go over the terms of your loan modification plan. Loan modification experts normally have extensive experience in dealing with lenders. So they can convince the lenders to properly implement the terms of the trial period. It would be easier for you to make your modification permanent if you get the help of a loan mod specialist.
As a borrower who wants to get loan modification, you need to pay close attention to your trial period. Make sure to pay your obligations during the trial period. If you show that you can manage the loan, then your loan modification will become permanent.
