If you’re having trouble keeping up with your mortgage payments, receiving a Modification Trial Plan Approval from your lender is a positive sign. It means your mortgage servicer is willing to work with you by offering a temporary trial period to test new payment terms aimed at making your mortgage more affordable.
However, it is important to understand that this approval does not permanently change your mortgage. Instead, it acts as a trial phase—usually lasting three to four months—during which you make reduced payments specified in the trial plan. Making these payments on time and in full is essential to qualify for the final, permanent loan modification.
How a Modification Trial Plan Works
- Application: You apply for a loan modification after experiencing financial hardship, providing required documents like pay stubs, bank statements, and a hardship letter.
- Servicer Evaluation: The mortgage servicer reviews your situation and determines if a loan modification with lower payments is viable for you and acceptable to the investor owning your loan (such as Fannie Mae or FHA).
- Trial Plan Approval: If qualified, you receive a written Modification Trial Plan Approval outlining the trial payment amount and duration.
- Trial Payments: You make the trial payments—typically over three months—paying exactly the specified amount on the due dates.
- Final Review: Upon successful completion, the servicer reviews your case and prepares a permanent loan modification agreement.
- Permanent Modification: You sign and return the final agreement, and your mortgage terms are officially modified.
Important Tips for Success
- Pay the exact trial payment amount on time every month.
- Keep records of all payments and correspondence.
- Communicate promptly with your servicer if problems arise.
Common Misunderstandings
- The trial plan is not a permanent modification until you sign the final agreement.
- Paying your old, higher mortgage amount during the trial can cause disqualification.
- Foreclosure is usually paused during the trial but can resume if you fail the trial plan.
Additional Resources
Learn more about the Loan Modification Trial Period Plan (TPP) and how mortgage servicers handle these modifications in our Mortgage Servicing article.
For authoritative guidance, visit the Consumer Financial Protection Bureau’s page on trial modifications at CFPB.gov.
Knowing the details of the Modification Trial Plan Approval helps you navigate the loan modification process with confidence and avoid common pitfalls. Successfully completing the trial period is a key step toward securing a permanent, more manageable mortgage payment.
