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Can a Defaulted Loan be Modified?

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Question: 
I would like to modify my client's defaulted loans with the lender, perhaps by getting the lender to add the arrears amount and assessed fees to the back of the mortgage contract. Is there certain documentation needed for this request, or how can I competently make this request?
Answer: 

Any loan can be modified if the lender and borrower are willing to accept the terms and the modification does not conflict with federal or state law.

Modifying a "defaulted" loan will be more difficult than modifying a past-due loan. Keep in mind the lender is under no obligation to modify the terms and in all probability will not make too many, if any, concessions on a defaulted loan.

You will have to negotiate with the lender and you will need your client's written authorization allowing the lender to discuss the situation with you.

First published on BankersOnline.com 3/7/05

First published on 03/07/2005

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