Attorneys Helping Homeowners Negotiate Loan Modifications in South Florida

Loan Modification is the permanent change in one or more of the terms of a mortgagor's loan. The changes to the loan allows it to be reinstated, and results in an affordable payment for the mortgagor.

If you are facing the possibility of foreclosure because you have fallen behind on your mortgage payments, it is important to act quickly.  Consult a foreclosure defense attorney who can help you keep your home from going into foreclosure.  A loan modification may be just the answer you are looking for to avoid foreclosure.  For others, bankruptcy or a short sale may be more beneficial.  No matter your particular circumstance, an attorney will provide and explain to you all necessary options.  Assistance in making the proper decision to best suit your individual financial needs gives peace of mind.

Benefits to Loan Modification.

1. Lower payment without refinancing
2. Late fees may be waived
3. Lower your interest rate

One of the most important steps in beginning the loan modification process is to know the lender’s requirements. Regardless of whether you’re applying for an MHA loan or a private modification through one of your lender’s own programs, you need to know what the lender’s expectations are.  Failure to meet all required qualifications will immediately deny your request.  Don’t rely on the government’s own “Making Homes Affordable” guidelines – it’s a voluntary program for lenders, so yours may have their own particular guidelines to be aware of.

*Under the government program Making Homes Affordable (MHA) one must qualify twice.  You must be accepted into the program first and then there will be a 3-month trial period allowing you to make the revised payments in order to prove the individual can afford the modified payments.  They will be verifying your information throughout the trial period.  There is still a chance your application may be denied if they confirm all of the required qualifications are not met.

1. Make all necessary documents available.

Again, this is part of knowing what your lender requires.  They may need information such as income, taxes, divorce decrees, death certificates for estates, other debts, etc. Make sure you’ve filled out all the forms properly – people have been turned down for something as small as failing to sign in the correct place.  Not submitting all of the necessary documentation is one of the main reasons for denial of permanent status during a trial modification.  Be sure to submit all your documents together, in one envelope. Doing otherwise is an invitation for things to be misplaced.  Make copies of everything for your records, in case questions arise over whether a certain document was/wasn’t submitted.

2. Be accurate.

It is very important to make sure all of the information requested for qualification is accurately submitted.  You must be completely honest about all of your debt and income. Applicants are often turned down for a permanent loan modification after being accepted into the trial period because the applicant can’t verify their income that was listed on the application.  There are several reasons for denial throughout the qualification process such as:  The borrower listed a higher income which can not be proven or all debts were not admitted, the income listed on the application doesn’t match tax forms, a person's income could change during the trial period or there may be a second person listed on the mortgage whose income can not be verified.  These are all legitimate reasons for denial. Be honest and upfront with all of the personal information because the lender is going to research everything.

3. Write a hardship letter.

Lack of a well written hardship letter could cause your application to be denied.  The hardship letter is not simply a routine letter– its purpose is to explain to the lender why you think a loan modification will help; the reason for your unexpected financial hardship, the situation you are in now and the reason you should be regarded you as a good risk. Basically, it’s your chance to convince the lender to grant you a loan modification.  If you doubt your own writing ability, get assistance from a capable writing source.

4. Don’t create new debt.

During the process of applying for a loan modification do not create new debts.  Creating more current debt shows the lender you don’t have a good handle on personal expenses.  The credit reports will show your lender any new debt acquired in addition to old debt. Your credit will be checked during your evaluation. In addition, it creates a discrepancy between the debt you reported and the debt reported later on your credit statements.

If you are looking for a way to solve your mortgage problems, consulting a lawyer and discussing loan modification is always better done as soon as possible. In this way the attorney may be able to help you avoid further problems.  Especially if foreclosure is imminent; an attorney may be able to negotiate a loan modification before you are actually served foreclosure papers. Often attorneys are more successful in reaching an agreement quickly when becoming involved early on.  An attorney should take the time to get to know their clients, to review the individual financial situations, understand the client’s unique goals and therefore assist the client in making a well-informed decision which is truly in the best interest of their client(s).  Following these steps won’t guarantee approval for loan modification. Although, these tips can help ensure you won’t be rejected for one of the most common mistakes during the qualification process.