Loan Modification in New York | What You Should Know

If you would like to learn more about your eligibility for a loan modification in New York, reach out to our dedicated Newburgh bankruptcy lawyer today.

Am I eligible to receive a loan modification in New York?

You will want to recognize that in the state of New York, not everyone is qualified for a loan modification. To determine your eligibility, the bank will have to examine your finances. Some of the documentation needed 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 confirm you are living in your home
  • A hardship letter that demonstrates the reasons why you are not capable of paying your mortgage at that moment. It is critical that you write this letter with an experienced bankruptcy attorney.

If you have further questions or concerns about eligibility requirements, do not hesitate to reach out to our firm today. Our legal team is here to help you.

What are the two main types of loan modifications available in New York?

If debtors are having a difficult time with their mortgage payments, loan modifications can be utilized. This permits debtors to adjust their loans so that the payments can better satisfy their financial requirements. It is critical to recognize the two kinds of loan modification programs in New York. They include the following:

Government-Run: This program refers to allowing a debtor to expand their loan to a 40-year plan that lowers the cost of their monthly payments and reduces the interest rate of the loan to 2% for a 5-year period.
Bank-Run: This option can reduce a debtor’s interest rate, repair an adjustable rate, or not permit them to pay the surplus principal.

What happens after I obtain a loan modification?

Keep in mind that if you get a government loan modification, your interest rate will be reduced to 2%, and your loan term will be extended to 40 years. After that, you will start obtaining lower monthly payments. On the other hand, an internal banking program may decrease your interest rate, fix an adjustable rate, forgive excess principal, or place your defaulted payments at the end of your loan. This implies that you may not have to pay these debts until you either refinance or sell your home.

Give our firm a call today if you are going through a foreclosure. You may be eligible to apply for a loan modification. Contact our firm to discuss the details of your case and your options. We are on your side.


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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