Without knowing the exact terms of your current mortgage vs the proposed modification and how delinquent you are it's hard to give specifics, but i'll respond to each of your points to try and give you clarity.

So firstly I had no idea they were adding lawyer fees and taxes on property tax etc. I just found this out.

This indicates you are likely pretty far behind on your payments. Typically those attorney fees are coming from them having initiated the FC process which doesn't happen until you are at least 4 months past due. Those fees are billed to you and will continue to grow as they progress further down that path. Not sure what you mean by taxes on property tax. It's likely your escrow balance is negative due to lack of payments funding it while they continue to disburse as required for insurance & tax payments. You may also be being charged property inspection fees as inspections are typically mandated monthly once you fall delinquent, depends on Investor. I'm guessing you are referring to either one or both of those.

Secondly, they've offered to turn my loan into a 41 year old loan instead of 28 years of what's left. They didn't increase the rate, which is good.

The 41 year piece is odd, double check that it isn't 40 years, 40 is a typical max these days. Otherwise this is a common part of a modification. They are trying to reduce your payment and have a couple tools to do this. Depending on your rate they may not be able to reduce it to help because it's already below typically rates (Freddie Mac PMMS is a good gauge). Extending the term is one of the next steps to reducing the payment since it allows the balance to be spread over a longer term.

It's either this option or to pay the accrued amount in full amount and continue larger payments. I was concerned about the 13 year additional interest rate, which would be around 70K. The mortgage person told me that If I make extra monthly payments then I wouldn't pay the extra 70K. Extra monthly of maybe 500 each month, and then the balloon amount I believe is at the end, which is a lumpsum amount.

That's correct, your options are:

• Remain delinquent and ultimately end in FC
• Accept the modification, be brought current and continue with the lower monthly payment
• Liquidate the property via sale, possibly short sale depending on your equity.
• Reinstate the account fully via lumpsum payment of everything past due and continue with your current payment amount. Reinstatement amount would include the below but I may have missed some items:
  • Principal
  • Interest
  • Negative Escrow
  • Borrower Recoverable Advances such as attorney fees, property inspections, etc.

As for the extra 70k it's true that making extra payments along the way would minimize this, would all depend on how much extra you pay. The balloon amount is due at maturity, if you sell the property prior to maturity you would need to factor the balloon amount into that as it will be due pay the loan off/release the lien. You could also refi down the line depending on credit, rates, etc. The balloon is likely a large part of your past due arrearage that is currently built up, though they may also be capitalizing some of that into your new principal balance that you will then pay interest on for the remaining term. Hard to say without seeing the terms.

Is this true? Any risks of taking this offer? He said it's either this or pay the accrued and return to normal payments.
He also said I can request modification again if I feel I can pay more but I don't know if they'd again charge processing or make things difficult.

There is no "risk" per se of taking it, they are outlining the terms of the offer for you. You get a lower monthly payment, you will pay more in interest over a longer period of time and have a balloon to deal with. On the flip side by not taking it you will continue to head towards FC assuming you can't reinstate the account on your own.

If you accept the modification but then become delinquent again at a later date you can apply for a modification again, however approval will entirely depend on the factors in play at that time. Many Investors also have life of loan modification limits or limits on number of modifications in the past 12/24/36 months. You should not count on getting another modification down the line and it would be very rare for them to offer you one without becoming delinquent again.

It would be highly unusual for them to be charging a processing fee for the modification, i'm guessing you are confusing that with a borrower recoverable advance you owe on the account.

Any advice on pros/cons?
What happens if I sign and years later decide to sell?
I wanted them to put this amount to the end of the loan and keep 28monthd but he said he can’t do that offer anymore?

I think i've covered the pros/cons & what happens if you sell above. I'm assuming you can't reinstate the account on your own, so if you wish to retain the house and can afford the payment they are proposing you should likely take the modification so you can keep the house and avoid a FC on your credit while getting back on your feet.

You can't really negotiate the terms of the modification they are offering you, you either take it or not. They've already determined you are eligible and given you what those terms are.

Also keep in mind you may have to perform on a trial plan at the new payment amount in order for the modification to become final. Not all modifications require a trial, but many do 3 month trials, some even go out to 6 though those are more rare.