1
Contact your loan servicer
Call the company you send your mortgage payment to. Tell them you're having trouble making payments and ask about loss mitigation options. In Pennsylvania, you can also call PHFA at 800-822-1174 for free help.
Loan Modification in Philadelphia
Can You Change Your Mortgage Terms? Here's How Loan Modification Works in PA
Learn how a loan modification can lower your mortgage payment in Pennsylvania. Simple guide to the process, timeline, and what to expect.
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What It Is
A loan modification changes the terms of your current mortgage. Your lender might lower your interest rate, stretch out your payments over more years, or even reduce what you owe. It's a way to make your monthly payment smaller so you can keep your home.
Pros and Cons
Pros
- You keep your home and stay in it
- Your monthly payment goes down
- It can stop a foreclosure if you act early
- It goes on your record as a modified loan, not a default
Cons
- It can take 30 to 90 days (or longer) to get approved
- Not everyone qualifies, and your lender can say no
- You may end up paying more over the life of the loan if the term gets extended
Best for
Homeowners who have steady income but can't afford their current payment, and want to stay in their home.
Typical timeline
30-90 days
from start to finish
How the process works
2
Submit a complete application
Your servicer will ask for documents like pay stubs, tax returns, bank statements, and a hardship letter explaining why you can't pay. Send everything they ask for. Missing documents are the number one reason applications get delayed.
3
Wait for your servicer's review
The servicer reviews your income, expenses, and the value of your home. They'll figure out if a modified payment makes sense for both sides. This step usually takes 30 to 60 days.
4
Accept or negotiate the offer
If approved, you'll get a trial period (usually 3 months of lower payments). Make every trial payment on time. After the trial, your modification becomes permanent. If denied, ask why and whether you can appeal or try a different option.
Not sure which option is right for you?
Compare all 5 homeowner optionsFrequently Asked Questions
Can I get a loan modification in Pennsylvania?
Yes. Pennsylvania law (Act 91) requires your lender to send you a notice before starting foreclosure, and that notice includes information about getting help. You can contact a HUD-approved counselor for free at 800-569-4287. They'll help you apply and talk to your lender.
How long does a loan modification take?
Most take 30 to 90 days from when you submit a complete application. If documents are missing or your servicer requests more information, it can take longer. A housing counselor can help speed things up.
Will a loan modification affect my credit?
It depends on your lender. Some report it as "modified" on your credit, which is much less damaging than a foreclosure. If you're already behind on payments, the late payments have already affected your credit. The modification itself helps you avoid worse damage.
What if my loan modification gets denied?
You can appeal the decision or ask about other options like forbearance or a short sale. Contact Philadelphia Legal Assistance at 215-981-3800 for free legal help. They can review your case and tell you what rights you have.
Related situations
These are common situations where homeowners explore this option.
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