Loan Modification Agreement

The loan modification agreement is made between the lender and borrower to reduce the payment burden of the borrower by reducing the interest rate on the loan, extending the length of the repayment of the existing loan, or providing the borrower with a different type of loan that fits the borrower's financial situation.

This kind of agreement is different from a forbearance agreement. A forbearance agreement provides short-term relief for borrowers who have temporary financial problems, while a loan modification agreement is a long-term solution for borrowers who will never be able to repay an existing loan. It is part of the loan modification process and will be executed after the lender has reviewed and approved your situation. Several steps to even get here are necessary and include providing a hardship letter to your lender.

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