Am I Eligible for a Loan Modification in New York? | What to Know

If you are facing foreclosure, you may be eligible for a loan modification. Continue reading and speak with one of our experienced New York bankruptcy attorneys to learn more about loan modifications in New York.

What is a loan modification in New York?

If debtors are struggling with their mortgage payments, loan modifications are an option. This enables debtors to modify their loans so that the payments can better satisfy their financial demands. There are two types of loan modification programs in New York. They are as follows:

  • Bank-Run: This program can lower a debtor’s interest rate, fix an adjustable rate, or not require them to pay the excess principal.
  • Government-Run: This program allows a debtor to expand their loan to a 40-year plan that reduces the cost of their monthly payments and lowers the interest rate of the loan to 2% for a 5 year period.

Am I eligible for a loan modification?

It is critical to note that not everyone is eligible for a loan modification. In order to settle your eligibility, the bank will reexamine your finances. Some of the documentation you will need to apply for a modification can include the following:

  • Profit and loss statements
  • Paystubs from all wage earners in your household
  • Your personal or business tax records
  • Various financial statements
  • A current utility bill that can verify you are living in your home
  • A hardship letter that explains why you are not capable of paying your mortgage at the present. It is essential that you write this letter with an experienced bankruptcy attorney.

If you have questions regarding your eligibility, do not hesitate to reach out to our firm today to discuss the specifics of your case and your options with our experienced legal team.

What will happen once I receive a loan modification?

If you receive a government loan modification, your interest rate will be lowered to 2%, and your loan term will be extended to 40 years. You will then begin receiving lower monthly payments. In contrast, an internal banking program may lower your interest rate, fix an adjustable rate, forgive excess principal, or place your defaulted payments at the end of your loan. This indicates that you may not have to pay these debts until you either refinance or sell your home.

If you are going through foreclosure, it may be in your best interest to apply for a loan modification. Do not wait to reach out to our firm today to speak with a skilled and committed bankruptcy attorney.


Michael D. Pinsky, P.C. represents clients in bankruptcy actions and related matters. Please call 845-394-2616 or contact the firm online to schedule a consultation.

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