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Mortgage Modification:

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Why do you need an attorney to help you?

Modifying your current mortgage agreement may be just the answer to fully resolve the situation you are currently dealing with, eliminating the threat of foreclosure and enabling you to make payments that actually work and are in your best interests. This process can be complicated and difficult to deal with, in addition to bringing about legal issues that may need to be addressed. An attorney can guide you through while protecting your financial interests, your credit and your home.

Due to the struggling economy, more and more people are falling behind on their mortgage payments. If you are one of those people, you shouldn't feel ashamed or embarrassed. Instead, you should strongly consider speaking with an experienced mortgage modifications attorney about your financial situation. There are many viable tools and resources available to people facing foreclosure. A knowledgeable lawyer can inform you of your best options and help you apply for a mortgage modification so you can stay in your home where you belong.

If you are at risk of losing your home due to foreclosure, a mortgage modification may be just what you need. A mortgage modification is basically a change to any of the original terms of your mortgage mortgage to prevent foreclosure. After a successful mortgage modification, you will no longer be under the threat of foreclosure as long as you continue to pay your mortgage payments based on the terms of the new, modified mortgage.

What is a Mortgage Modification?

A mortgage modification is basically a change to one or more terms in a mortgage mortgage. Usually changes will be made to the interest rate, monthly payment amount, the length of the mortgage, etc. When a person modifies their mortgage, the terms and conditions of the mortgage are changed to meet the homeowner’s current financial situation. The purpose of a mortgage modification is to help people who’ve fallen behind on their mortgage payments keep their home, since homeowners in these situations often find themselves facing foreclosure. By modifying their home or mortgage mortgage, homeowners have a much better chance of avoiding foreclosure and keeping their homes.

Ways to Modify a Mortgage:

There are several ways to modify or change a mortgage.  An experienced mortgage modification lawyer can advise you of what’s best for your situation, and help you negotiate for:

• A change in the terms of your mortgage to make it more affordable
• A change in your mortgage from an adjustable rate to a fixed rate
• A change in the length of the mortgage
• An extension of payments
• A waive of accrued interest
• Bringing your mortgage payments current
• Reducing your mortgage balance
• A forbearance agreement (short-term relief to people experiencing temporary financial problems, usually due to a job loss or medical condition)
• A short sale

 

Loan Modification Eligibility

• Minimum of 12 months elapsed since loan origination date.

• The mortgagor [homeowner]  most be delinquent (3 full payments due and unpaid) or more.

• Default due to a verifiable loss of income or increase in living expenses.

• The Loan Modification mortgage must remain in the first lien position.

• Loan may not be in foreclosure when executed.

• Owner occupant, committed to occupy property as primary residence.

• Mortgagor has stabilized surplus income sufficient to support the Loan Modification mortgage.

• Does not have another FHA-insured mortgage.

In some cases, the banks today will modify loans for those who are less than three months late. And, banks will modify investor-owned or non-owner occupied. Banks do require financial information, such as pay stubs and tax returns, but credit scores are not an issue.

What this all means is that you must have enough income to support the new payment. Banks will not modify your loan if you cannot show you have the income to sustain the new, lower, payment.

If you can’t show the income, then the best option for you is probably a short sale which will do less damage to your credit than a foreclosure and allow you to purchase another home within 2 years, provided, of course, you’ve paid your debts during these years and you can qualify for a loan.

 

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