Foreclosure and Loan Modification Blog

Homeowners across the country are trying to get mortgage loan modifications that will allow them to avoid foreclosure. They're behind on their house payments, and a permanent change to the terms of their loan that reinstates it with a lower payment is their only hope of keeping their home.

But, for many people, working with their bank on their own simply isn't getting them the results they need. So they're wondering if they should continue to go it alone or get professional help. If you're trying to decide, here are some things to take into consideration.

First, it is possible to get a loan modification on your own. You don't have to pay anyone to assist you. And considering that it also doesn't cost anything to apply for or get approval for a loan mod, trying for yourself can seem like an attractive option.

On Tuesday, May 2, 2016 a Manhattan federal court convicted Dionysius Fiumano of “orchestrating a massive mortgage modification scheme through which he and his conspirators defrauded more than 30,000 American homeowners out of a total of approximately $31 million,” according to Christy Goldsmith Romero, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

Dionysius Fiumano, aka “D”, and his co-conspirators oversaw a sales staff of 65 telemarketers and managers from 2011 to 2014. Fiumano was the general manager of sales at Vortex Financial Management, Inc, which was also known as Professional Marketing Group (PMG), and Professional Legal Network. The company was based in Irvine, California and claimed to offer mortgage modification services.

PMG operated somewhat like a legitimate company, buying leads that gave them the contact information of homeowners who were behind on their mortgage payments and in danger of foreclosure and trying to get them to buy their "services."

So you're experiencing every homeowner's worst nightmare: the 'f' word. Foreclosure. The stress it causes is a serious threat to your health. People in foreclosure are at an increased risk of suicide and mental and physical health problems. And, of course, you will eventually lose your house if you don't resolve the situation.

You're far from the only one in foreclosure and in desperate need of a home-saving resolution. Fortunately, there happens to be a great one out there called a loan modification.

Modifying your mortgage loan involves making a permanent change to one or more of its terms so the monthly payment is lowered to a level you can afford. The interest rate can be moved to as low as 2% and the term can be lengthened to as much as 40 years.

Loan modifications can be granted through the federal government's Home Affordable Modification Program (HAMP) and through a lender's in-house modification programs.

When you have a problem with your mortgage, it can be very challenging to get your loan servicer to work with you to fix it. Applying for a loan modification, many homeowners feel like their bank actually wants them to fail so they can foreclose on their home.

To state the obvious, when you're contacting your bank it's because something's gone wrong, such as divorce, illness, or loss of income. Maybe all three at once. Something's caused you to be unable to pay your mortgage and be at risk of losing your home to foreclosure. It's an awful situation to be in.

Fortunately for you, there's this amazing thing that could permanently lower your monthly payment to an affordable portion of your income and enable you to keep your home. It's called a loan modification, and it works by changing the length of your loan term, interest rate, and/or reducing principal. It costs nothing to apply and there are no closing costs.

In the first quarter of 2016 the U.S. saw less foreclosure activity than in any quarter since the fourth of 2006. But New Jersey continues to struggle with a foreclosure rate that's much worse than the national average.

Nationwide, one in every 459 homes in the country had a foreclosure filing in the first quarter of 2016. But in the garden state it's one in 216.

According to RealtyTrac's Foreclosure Market Report the only state with more is Maryland with one in every 194 housing units having a default notice, scheduled foreclosure auction, or bank repossession.

Southern Jersey and Atlantic County are struggling particularly hard.

“Abandon ship!”

That's the thought some homeowners have when they miss a few mortgage payments and realize they will not be able to keep their home. If the ship's going down, it's better to get off sooner rather than later, they reason.

Just because you can't afford your mortgage payment doesn't mean you need to leave your home right away. You have the right to stay in your home until the foreclosure process is finished, which can take months or years.

A little knowledge of the process can help you to stay in your home as long as possible without making mortgage payments and land on your feet if and when you do leave.

Retirement is supposed to be the best time of your life, the reward for your decades of hard work. A time to not worry about the things you've been worrying about your whole life, especially money. Unfortunately, many seniors find themselves worrying not just about money but also about avoiding the foreclosure of their largest asset, their home, in their golden years.

While dealing with the prospect of foreclosure is never easy, it can be especially difficult for retired people, the elderly, and those on a fixed income. People plan so that the expenses for the rest of their life can be paid from their Social Security benefits, retirement plan, and savings before they retire. But sometimes there are unexpected expenses that throw everything out of balance and leave a retiree unable to pay their mortgage.

We posted a blog yesterday stating that loan modifications that reduced principal for borrowers with loans insured by Fannie Mae and Freddie Mac were being considered by their regulator, the Federal Housing Finance Authority (FHFA). Since then, Fannie Mae has announced the Fannie Mae Principal Reduction Modification Program. According to their website:

Homeowners facing foreclosure whose mortgage loans are insured by Fannie Mae or Freddie Mac have not been eligible for principal reductions, which is one of the best tools for making mortgage payments more affordable, when modifying their loans. That may be changing soon.

Fannie Mae and Freddie Mac are regulated by the Federal Housing Finance Agency, or FHFA, which has indicated that it is considering allowing principal reductions.

However there have been conflicting reports on the FHFA's intention. The Wall Street Journal reported in March that Fannie and Freddie principal reductions were going to happen. But that same day FHFA's director Mel Watt said that no decision had been made.

Recently some people in high places have asked the FHFA to allow principal reductions. According to housingwire.com,New York's attorney general Eric Schneiderman wrote a letter to director Watt saying that principal reducing loan modifications“should be deployed broadly and quickly to homeowners in desperate need of this relief from the continuing damage caused by the housing crisis.”

Abraham Lincoln said “He who represents himself has a fool for a client.”

Honest Abe was talking about legal representation when he said that, and a century and a half later his advice still rings true. President Lincoln was a lawyer himself and knew that it just doesn't make sense to act as your own attorney, even if you are one.

But some people have been doing exactly that in recent years while trying to avoid losing their most valuable investment, their home, through foreclosure. Seven million homeowners have experienced foreclosure since the housing crisis began and many of them don't have a clue about how to deal with it.

Their bewilderment is completely understandable. Foreclosure was never part of any homeowner's plan. Unfortunate circumstances beyond the control of any individual homeowner has made foreclosure something that millions of homeowners have been forced to learn about.

Some look into it and think they can handle everything on their own. “How hard could this be? I can answer a complaint and fill out a request for modification assistance without a lawyer.”

Others learn about the laws pertaining to foreclosure and the ways to avoid it and conclude that having an experienced attorney on their side is essential. While every person's situation is different, there are important reasons for everyone with mortgage problems to seriously consider hiring an experienced attorney: