Loan Modifications with Bad Credit Loan modifications are the perfect way for distressed borrowers to solve a delinquent mortgage problem. Even if you have late mortgage payments, collection accounts, liens, judgments, or any other derogatory credit you can qualify for a loan modification. Most homeowners in need of a change in their mortgage terms immediately think of a traditional refinance. However, many distressed borrowers cannot refinance because they do not qualify. As most people know there are many qualifiers to be able to obtain a refinance of an existing mortgage. These qualifiers do not apply in the same way when it comes to a loan modification. Some of those qualifiers are: Good Credit Equity Employment Income CREDIT The beauty of a loan modification is that since you are working with your current lender who is already invested in you an disputing credit report d your home the criteria are far less stringent. The toughest mortgage qualifier for a borrower who is behind in payments is credit. When it comes to a loan modification your credit is not analyzed. EQUITY In today’s tough real estate market property values are plummeting. Many homeowners do not have the equity required to refinance. Remember if you are financially upside down in your home, your lender is too. Your current lender will not have an equity requirement when it comes to modifying your loan. EMPLOYMENT When it comes to employment, the normal mortgage requirements again do not apply. When applying for a new mortgage a lender will require a minimum of 2 years on the same job. In regards to a loan modification, the only requirement will be proof that you are indeed working. INCOME Income is also an important qualifier in the mortgage process.