Loan Modification FAQs

See below for DFI's answers to questions frequently asked about loan modifications.

For more information, see MBPA and CLA IS-2009-01 (PDF)*.

Are short sales a type of loan modification under the Mortgage Broker Practices Act?

No. Pursuant to Interpretive Statement IS-2009-01, a loan modification includes: forbearances, repayment plans, a change in interest rates, loan terms (length), or loan types, the capitalization of arrearages, and principal reductions. Refinances or sales of the property are not loan modifications.

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Does DFI regulate real estate professionals who engage in short sale activities?

No.

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Can real estate professionals provide loan modification services?

No, not without a license under the Mortgage Broker Practices Act or Consumer Loan Act.

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Can a loan originator provide loan modifications outside of the broker’s sponsorship?

No. A loan originator license does not stand on its own. Every service provided by a licensed loan originator is provided under the broker’s license and bond.

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