• DYE CULIK PC | Consumer Protection Division

4 Truths About Getting a Loan Modification from Your Mortgage Company

Updated: Jan 20

This post explains 4 truths about loan modification can be obtained by homeowners in North Carolina. If you’re struggling with your mortgage payments for any reason – because of the novel coronavirus (COVID-19) pandemic, unemployment, medical issues, or other financial reasons – you may want to save your home from foreclosure with a loan modification.

What is a loan modification? It is one or more changes the repayment terms of your mortgage. The monthly payment is reduced, and any past-due amounts are added to the back of the loan. The payment is reduced by adjusting the interest rate, the time for repayment, or sometimes the principal amount.

Our office has been handling mortgage issue, loan modifications, and foreclosure prevention for over a decade. There are 4 truths about loan modifications that every homeowner struggling with their mortgage should think about. Here they are.

1. Ask Questions

Knowledge is power. It’s a cliché, but it’s a cliché for a reason. You should ask questions about loan-modification options to your bank or mortgage servicer. If the representative you speak with doesn't give a satisfactory answer, escalate to a supervisor.

You should ask questions such as Who owns your mortgage? What are the mortgage servicing guidelines applicable to your loan, and What relief – loan modification, forbearance, or other something else – are you are legally entitled to?

Sometimes, a loan modification can be expedited by contacting the owner of your mortgage directly. In certain cases, you may be able to reach helplines set up by Freddie Mac, Fannie Mae, the FHA, or other investors. These or other resources help you get answers to questions about your situation – and how to get through it.

In short, if you want a modification or other foreclosure-avoidance solution, do your research. Find out as much as you can from any authoritative source that you can. Read news articles, websites like this one, and ask questions. This will arm you with the knowledge you need to get through your mortgage situation with a solution that works for you.

2. The Sooner the Better

There’s no time like the present. It’s another cliché, but again, it’s true when it comes to getting a loan modification or a forbearance.

Loan modification and forbearance programs typically are not automatic. If you do not apply, your bank or mortgage servicer does not know you need one. They will assume you just do not want to pay. They are only obligated to try to help when you ask for it.

If you apply for your modification or forbearance immediately, you are less likely to be declared in default. Your loan will be put in a program and you will be able to stop the foreclosure process.

On the other hand, if you stick your head in the sand, the default and foreclosure processes will probably begin as soon as you miss your first payment. You may feel stressed, especially if you need a modification because of things like job loss or other financial issues. The natural tendency is to ignore it for as long as possible. Don’t do that. If you want to help yourself, act immediately.

The sooner you apply for a loan modification or forbearance, the sooner you will get a decision on your application, and the sooner it is that you may get some relief.

3. Be Persistent

The best way out is always through. Getting a loan modification or a forbearance can be difficult. Banks and mortgage servicers are overwhelmed with applications. They are set up to handle in normal amount of applications, not the flood that has come in because of COVID-19. When you apply for a modification it is likely, and you should expect, that there will be snags in the process.

What commonly happens is that your documentation is lost, not reviewed, that redundant documentation is requested, or even, sometimes, that you get denied wrongly.

What should you do if this happens during your modification process? What should you do when your bank or mortgage company demands information you already provided? Keep your head down and keep moving forward. Provide the documents again. Be persistent. Make phone calls every week to check on your application, because it’s unlikely that the representative assigned to your case has the resources to call every homeowner every week with an update.

Getting a loan modification or forbearance requires being proactive. Keep copies of everything you send, just in case the bank says they didn’t receive it. Keep a log with the date of every call and the name of every person you spoke with. Document everything.

In our firm’s experience the homeowners who are persistent are the ones who are most likely to be offered the relief they need – a loan modification.

4. Sometimes You Shouldn’t Do It Alone

Two heads are often better than one. For most people their home is the biggest financial investment they will make in their lives. It’s where they live with their families, it’s where they keep all their treasured possessions, and, as the saying goes, it’s where their heart is. Because of how important your home is to you, it may be difficult to approach the loan modification or forbearance process on your own. It may be hard to separate your personal feelings from the hurdles that need to be overcome during the loan modification process. This is when you may want to reach out for a helping hand.

Federal law permits you to obtain legal representation for help with a loan modification. Banks and mortgage servicers must deal with you through your attorney if you ask them to. Why would you want to? Because most people use attorneys for the major legal events in their lives: when starting businesses, buying houses, getting divorced, probating wills, and resolving other important disputes. Therefore, if you are trying to save your house from foreclosure during a global pandemic, it may also make sense to seek legal counsel.

Federal law prohibits what are called “mortgage assistance relief services,” which are non-attorneys who charge advance fees for loan modifications. Only attorneys who deposit client funds into trust accounts are permitted to give legal advice and represent clients with respect to their banks or mortgage servicers for loan modifications. Our office fully complies with all North Carolina and federal rules.

When banks and mortgage servicers violate the loan-modification rules, there may be grounds for a lawsuit under the North Carolina Unfair & Deceptive Trade Practices Act, the Fair Debt Collection Practices Act, or the Real Estate Settlement Procedures Act. Our office has filed lawsuits against mortgage companies under all these laws. We have successfully negotiated hundreds of solutions for families.


These have been 4 truths about getting a loan modification. It’s not always easy, but the guidelines in this post provide a framework. If you need a loan modification or a forbearance because you are struggling with your mortgage payments due to the effects of COVID-19, or for any other reason, contact our office for assistance with a loan modification or forbearance. We offer free case evaluations to determine whether we may be able to help.