The Law Office of Michael E. Ripley

Exceeding Expectations

Loan Modification FAQ

Frequently Asked Questions about Loan Modifications


Q: What is loan modification and how is it done?

A: Loan modification is a permanent change in one or more of the terms of a mortgage loan between a homeowner and his or her bank or lender.  The modification can be a reduction in the interest rate or payments, converting a variable rate to a fixed rate loan, reducing the principal of the loan, extending the term of the loan, or addressing tax arrearage, escrow fees, taxes and insurance.


Q: Why choose loan modification?

A: Loan modification works to create a mortgage resolution that is financially sustainable for a homeowner. The most common benefit to the homeowner is avoiding foreclosure. Lenders benefit by reducing the losses they would incur through foreclosing on the homeowner.


Q: What if my credit is bad?

A: Whether your credit is good or bad does not determine if you get a loan modification.


Q: What if I don't have any equity or I'm upside down on my mortgage?

A: Generally, people who are seeking loan modifications want to stay in their house even though they owe more than it is worth.


Q: What can a prospective client expect in terms of a loan modification?

A: You will know what to expect during the first meeting with us. The government's guideline is a house payment cannot exceed 31 percent of your gross income. If a payment is 40, 50 or 60 percent of your gross pay, you can expect to get your payment down.


Q: How much can someone expect to achieve dollar wise?

A: This dollar amount varies. Generally, with 30 to 40 years left on a loan and a savings of $500 a month, there would be a savings of over $150,000 over the life of the loan.


Q: Do all banks engage in loan modification?

A: All banks are supposed to engage in loan modification. Some are easier to work with than others. We have been successful in getting loan modifications from every lender out there.


Q: Is the government involved?

A: Yes, it can be, and there are several programs offered under President Obama's Making Home Affordable program. These include: Home Affordable Refinance Program (HARP), Home Affordable Modification Program (HAMP), Second Lien Modification Program (2MP) and Home Affordable Foreclosure Alternatives Program (HAFA).


Q: How long should a client expect the process to take?

A: There is no easy answer and each case is different. But most cases are successfully completed within 60-90 days.


Q: What should I expect my payments to be for my new loan?

A: The guidelines used by each bank are different, and the guidelines have been changing on a continuing basis. Typically, your lender will modify your loan so that you can afford to make your monthly payment. They do this by lowering the interest rate, extending the life of the loan, by principal reduction, or otherwise, by reducing the monthly payment so that you can continue to live in your home.

Contact Us

The Law Office of

Michael E. Ripley

Loan Modifications

12520 High Bluff Drive

Suite 110 (First Floor)

San Diego, CA  92130

Phone (858) 792-5800

Fax (858) 794-9132


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8:30am to 5pm

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