There are chances that the borrower may be facing hindrances in paying the loan. A loan modification agreement is a document where modification to the existing loan agreement is made due to the borrower’s incapability to repay the loan. This agreement usually includes reduction in the interest rate or increase in the time period.
Sample Loan Modification Agreement:
The loan modification agreement drafted on 24th of November 2010 between Jeremy Creek Financial Organization, the Lender and Henry Cooper, the Borrower amends the interest rate, the repayment time period and the mortgage dated 20th October 2009 recorded as per the laws of the state of California.
In consideration to the loan agreement drafted, earlier the following changes will be made to the terms and conditions of the loan agreement:
The interest rate will be reduced to 8% per annum from 10% per annum.
The time period of repayment of the loan will be increased from 10 years to 15 years.
The Borrower won’t be charged for any late payment fee if he fails to pay the installment by the due date but he will be considered a defaulter if he fails to pay the installments for six consecutive months.
Thus, both the parties have agreed to the modifications by putting their signature below:
Harry Jacobs Henry Cooper
(On behalf of Jeremy Creek Financial Organization)