Loan Modification

loan modification helpIf a borrower cannot afford the monthly mortgage payment but wants to remain in the home, this may be the best option. The purpose of a loan modification is to provide a long term solution for the homeowner, who, due to unforeseen circumstances no longer can afford the payment or is draining all the savings to keep up. Through this process, the lender who grant the borrower a more manageable repayment plan in order for the homeowner to keep the house. When successful, the terms of the mortgage are adjusted to make the monthly payment affordable. The workout plan varies by circumstances and lender but possible terms could include a lower interest rate and past due amounts rolled into the loan.

The loan modification process can be long and complicated. It is not just a matter of sending forms and documents to the lender and hoping for the best. Each application must be structured properly so the that the lender is convinced it is in its interest to approve the modification and offer the lowest possible payment. This includes presenting the financial overview in the right way as well preparing a convincing hardship letter. That is why it is important to have a law firm familiar with the lender and familiar with all available loan modification programs.

There are many programs available, including the Home Affordable Modification Program (HAMP). This is where the bank compares the borrowers’ gross income to the borrowers’ housing payment. Not every borrower will qualify for this program and not every lender participates in this program. Even if the borrower does not have HAMP available, the lender will have other programs available. In addition, the HAMP program may not give the homeowner the best result. There may be other programs which will help the borrower more. The bank will not tell you about this. That is why the borrower needs a knowledgeable attorney to navigate through all of this.  The bottom line is that banks have lawyers, why not you?

As part of our service for a loan modification, the bank is requested to provide information. This would include copies of the note, mortgage, any assignments and all documents generated when the loan closed. This is to make sure the lender has the legal ownership of the mortgage and there was compliance with all relevant Federal banking and lending laws. If there is a problem or some discrepancy, it is used as a negotiating tactic for the benefit of the borrower.

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