You may be like millions of other home owners who have suffered setbacks that have made it difficult to afford your current mortgage. Consequently, you may have become delinquent with your mortgage payments and face foreclosure.
The reasons for financial struggles vary, including illness, job layoff, divorce, or other circumstances. Many borrowers have underwater mortgages, owe more than the home is worth and are seeking financial relief.
However, many homeowners do not understand that it may be possible to obtain loan modification help.
A loan modification changes the terms of your current home loan; common results include a lower interest rate or a lengthened loan term to reduce your monthly mortgage payments.
About Loan Modification Programs
For homeowners who need help, there are numerous loan modification programs such as the federal government’s Home Affordable Modification Program (HAMP), which expires on December 31, 2013. Some mortgage lenders have private initiatives.
These programs offer multiple options for borrowers depending on their personal circumstances. Each lender has their own criteria for qualifying, but all the initiatives are intended to offer the assistance borrowers need to remain in their homes when facing financial adversities.
Should You Hire An Attorney?
Many homeowners have heard horror stories where homeowners attempt to obtain loan modification, only to get caught up in a slew of problems with the program. Some other issues include:
- Application backlogs
- Repeated requests for the same paperwork
- Record-keeping problems
- Changes to the initial loan modification terms after trial period
One homeowner, a filmmaker out of California, even made a short video about Bank of America's multiple requests for the same paperwork and the eventual rejection of his application for a loan modification.
Inevitably, the question arises of whether a borrower should secure loan modification help by hiring an attorney to help them achieve their primary objectives: lowering their monthly mortgage payments and remaining in their homes. The services of an attorney experienced with loan modifications and the foreclosure process could have helped many of the estimated 4.5 million Americans who lost their homes to foreclosure. Lawyers can help homeowners understand the process of foreclosure and a homeowners' legal rights. Some other benefits of seeking legal counsel include:
1. Negotiate loan modification terms with the lender
2. Complete the required paperwork
3. Stop a foreclosure sale of your home
The strategy of forestalling the sale of your home at a foreclosure auction may not affect whether you complete a loan modification successfully. However, it can provide a homeowner the time needed to get through a loan modification trial period or bring delinquent mortgage payments current.
Naturally, most mortgage lenders will vehemently argue that a homeowner can receive more benefit by avoiding the “unnecessary” expenses of obtaining legal help and applying the money towards their delinquent mortgages.
Other Options for Loan Modification Assistance
Mortgage servicers have improved staffing to better manage the call volume and documentation process. They now claim that borrowers can get the loan modification help they need from banks’ customer service department without all the obstacles associated with the process during the foreclosure crisis.
The U.S. Department of Housing and Urban Development has approved nonprofit housing agencies that provide free assistance for loan modification services.
An Attorney Can Stop Foreclosures
Many home homeowners have been able to get their loan modifications without hiring an attorney. Nonetheless, some borrowers need the assistance that an experienced lawyer can offer.
An attorney can make the necessary calls, send letters, and follow-up as needed to ensure that your request for a loan modification doesn’t get lost in the pile of other homeowners.
For a good number of borrowers already deep in the foreclosure pipeline, an attorney can halt the foreclosure process. The strategies an attorney uses depends on the borrower circumstance, but may include filing bankruptcy for homeowners with deteriorated finances or obtaining a court order to stop the foreclosure for other legitimate reasons.
The loan modification process can become convoluted and confusing. An experienced foreclosure attorney can help you get a loan modification with reasonable terms that increases your likelihood of successfully completing the program.
