A trial payment plan ("TPP") is the first step in the loan modification approval process. A TPP typically requires homeowners to make mortgage payments for a fixed number of months -- usually 3 months -- before the lender agrees to fully modify the loan. The amount of the TPP payment should be close to what the fully modified loan payment will be at the end of the TPP period.

What is the purpose of trial payment plans?

Trial payment plans are a test of one's ability to make consistent and affordable mortgage payments. Lenders want to avoid the scenario of offering a permanent loan modification, only to have the homeowner default after a short period of time has passed.

Is the trial payment plan the same as the loan modification?

Although the TPP payment amounts are usually close to the final loan modification amounts, lenders are not required to dislose the final loan modification terms until the end of the TPP period. The majority of the time, however, TPP payments are nearly identical to loan modification payment amounts.

What happens if you miss a payment or otherwise default on a trial payment plan?

If you do not timely make your TPP payment, the lender has the ability to close out the TPP agreement. Once a TPP agreement is closed out, the loan modification process is also closed -- and homeowners will need to re-apply from the beginning to obtain a new loan modification. Keep in mind that lenders tend to move more quickly with the foreclosure process if you default on a TPP loan.

At The Law Center, we are a team of specialists that are passionate and up to date about the foreclosure process and loan modifications from start to finish and helping homeowners at the highest level. Our staff and attorneys approach each client and each property as a new challenge, one that requires thorough analysis, zealous representation, and thoughtful strategy. It’s your home, let The Law Center help you defend it.

Call us now and speak with a foreclosure expert on how you can make the foreclosure process work for you -- not against you. (312) 600-8815

‍