1st Lien Modification Question

[Joshua Andrews]

I have a question regarding modifying a defaulted 1st lien on a property. Here is an example. The original payment was extremely low, say $200. It was since defaulted on years ago, and now arrears have accrued. Is there anything preventing the note holder of working out a modification with the borrower where the monthly payment is MORE than the original payment they have defaulted on?

To be clear it would now be more because the total balance they owe would be more, etc. I have never run into a situation like this so I thought I would get some feedback. Thanks!

Josh

[Christopher Winkler]

Hi Josh, good question. One thing you might want to consider is a forbearance agreement for 6 months to make sure they can even handle the new payments, since in the past $200 was too much. Then, if it's a homeowner, use a RMLO to mod the loan to stay in compliance with all the laws. If its an investor, you can use a standard HUD note template and write it yourself. Good luck!