LOAN MODIFICATIONS

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LOAN MODIFICATIONS

WHAT IS A LOAN MODIFICATION

Lenders agreement to change the terms of the mortgage agreement by either decreasing the amount of monthly payments, lengthen the term of the loan, and or decreasing the amount of interest on the loan.

WHAT DOES THE PROCESS INVOLVE

Generally, the mortgagee/lender has a specific department that deals with the intake of loan modification requests. These departments “determine” whether a particular borrower qualifies for the request. If they make an initial determination on the request that the borrower “qualifies” they will direct the borrower to submit paperwork and other items. A person in that department may make some suggestions to the borrower on how to be approved for the request. The most frequent one I hear about is for the borrower to stop paying their mortgage. Be careful with heeding to this advice as these employees are not Attorneys and do not know the ramifications of what they are advising you to do. In North Carolina, for example, if you default on your mortgage nothing short of bankruptcy will stop foreclosure once they process has begun. This is the case even if you have a loan modification application pending.

WHAT IS H.A.M.P

Home Affordable Mortgage Program (HAMP) it is federally sponsored loan modification program that was created in 2009. The program will expire on December 31, 2012. There are incentives for both lenders and servicers. Though virtually most lenders are offering loan modification programs, but not all are participating in the HAMP program. There is no requirement that lenders participate in the program only incentives to do so.

IS THERE ANY GUARANTEE THAT MY LOAN MODIFICATION WILL GO THROUGH

No, although there is some governmental incentive to approve most loan modifications the lender is under no obligation to approve your request. Beware of any company that can guarantee absolute success on Loan Modification approval, because more than likely it is a scam. These companies are filed with people who have the same or sometimes less knowledge about Loan Modifications and the Law.

WHAT KIND OF RECOURSE DO I HAVE IF MY LOAN MODIFICATION DOES NOT GO THROUGH

There are some cases right now where a borrower has sued their Lender for “unfair and deceptive trade practices” for denying their loan modification. But these type of cases are costly and time consuming, If you are in a situation where you are behind on your mortgage the last thing you want to do is incur another cost in the hopes of winning a battle against the Lender.

DO I HAVE OTHER OPTIONS

Yes you do. If you can qualify for a refinance at a lower fixed interest rate than that would be a good first step. If not then you need to consult with a Attorney who has experience dealing with Loan Modifications, Foreclosures, Bankruptcy, or any other debt relief.  Chapter 13 Bankruptcy offers the option to modify secure debts  such as mortgages and car loans. In a Chapter 7 the process can be achieved but will need to be initiated outside of the bankruptcy proceeding.

Maxwell Law Firm represents clients in North Carolina with: bankruptcy court, filing for bankruptcy, Chapter 7 bankruptcy, foreclosure defense, Chapter 13 bankruptcy representation, and loan modifications. You may schedule your appointment by calling 704-780-1100 or save 25% off the fees and schedule online.

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