A credit change may include a reduced interest rate, longer repayment period, another type of loan or any combination of these loans. Such changes are usually made because the borrower is unable to repay the original loan. Most successful credit change proceedings are negotiated with the help of a lawyer or comparison company. Some borrowers are entitled to government assistance to change loans. A mortgage modification request requires details of a borrower`s financial information, mortgage information and details of the difficult situation. When a borrower is approved, the authorization contains an offer with new conditions for the credit change. Some traditional lenders have their own credit change programs. Some of these programs have matured, but public credit modification assistance remains available to some borrowers. This implies that mortgage credit changes are the most common because of the large amounts of money involved. During the foreclosure crisis, which took place between 2007 and 2010, several public credit modification programs were put in place for borrowers. There are two sources of professional assistance in negotiating a credit change: the credit change is a change in the terms of an existing loan by a lender.

It may include a reduction in the interest rate, an extension of the repayment period, another type of loan or some combination of the three loans. Although a loan change can be made for any type of loans, they are most common for secured loans such as mortgages. A loan modification agreement is not the same as a leniency agreement. A leniency agreement provides short-term facilities for a borrower with a temporary financial problem. A loan modification contract is a long-term solution. A lender may accept a credit change during a resolution procedure or in the event of a possible enforced execution. In such cases, the lender has concluded that a credit change is less costly to the business than forced execution or debt clearing. Federal assistance is also available for some borrowers. U.S. Department of Veterans Affairs.

„Will help avoid silos.“ Access on November 12, 2020. U.S. Department of Housing and Urban Development. „FHA-Home Affordable Modification Program (FHA-HAMP).“ Access on November 12, 2020. Each program has its own qualifications and requirements. These are usually based on the amount owed by the borrower, the property used for the guarantees and certain features of the guarantee.