As a loan officer, you will have clients come to you for advice about restructuring their loan. Also known as loan modifications, restructuring a loan makes the current loan more affordable for the borrower and they can possibly avoid foreclosure.
Restructuring verses Refinancing
First, you must understand that restructuring a loan is not the same as refinancing a loan. When you refinance a loan, you are essentially creating a new loan for the borrower. Then, the new loan pays off the old one .On the other hand, restructuring a loan means the existing loan is kept, but modified for lower payments so a homeowner can afford to pay their monthly statements. [Read more…]