Recently, I have had a lot of questions regarding loan modifications from lenders. They are hoping to save the borrower money while retaining their lien position. Here are some things to consider. When a loan is modified, whether to change terms, loan amount or add additional properties, unless an endorsement to the title policy is issued, the coverage under the origianl title policy could be jeopardized. Your title company must do a update since the effective date of the policy to ensure no other liens have been filed or will attach. If their are liens they must be dealt with so priority is not lost.
If a lender chooses to modify the original Note and Deed of Trust anyway, they need to realize that the changes may not have the same lien priority as the orinal loan did. The lender is some cases may lose complete priority of their loan depending on the types of changes made. Before the modification takes place the lender should consult their attorney and title company.
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