LOAN MODIFICATION
A loan modification is simply a permanent, negotiated change of terms in the promissory note secured by a deed of trust on your property (your mortgage). The change(s) can be a reduction in the interest rate, an extension of the term for repayment, a reduction in the principal balance or some combination of these. There is some confusion between a loan modification and a forbearance agreement. A loan modification is a long term permanent solution for borrowers that show an inability to repay the existing loan while a forbearance agreement is short term relief for those suffering a temporary financial problem.
If your circumstance has changed or the terms of your financing have, a loan modification may be right for you. An essential question addressed in all loan modification submissions is the existence of a documented hardship. Even if the hardship is temporary, the most important aspect of the hardship is that it must be provable. Borrowers qualify for the following:
-
Adjustable Mortgage Rate is About to Reset
-
Job Loss/Reduction in Income
-
Failed Business
-
Illness of a Borrower’s Family Member
-
Divorce/Separation
-
Death in Family
-
Military Duty
-
Medical Bills
-
Incarceration
-
Failed Business
-
Abandonment of Property
-
Problems with/Damage to Property
-
Inability to Sell the Property
-
Inability to Rent the Property
-
Mortgage Servicing Problems
-
Transfer of Ownership Delays
-
Job Relocation
-
Death of the Borrower
-
Death of Spouse or Co‑Borrower
-
Damage to Property (natural disaster or unnatural)
Why Hire A Lawyer?
Negotiating Contracts is Practicing Law
You should know that despite the news stories and barrage of advertising by “Loan Modification” companies and their ilk, meaningful, voluntary loan modifications only occur for a small fraction of applicants. However, many more lenders “volunteer” to renegotiate the loan terms when litigation, the threat of litigation or bankruptcy accompanies the application . That is where hiring a lawyer to review your case and represent you in the process makes sense. Your chances may be improved if the lender has violated the law during the loan process or subsequently, but you will never know unless you case is analyzed by someone who can do something about it. Only an attorney can review your particular case to determine if the lender, servicing company, or loan originator violated the Truth In Lending Act (TILA), Real Estate Settlement Practices Act (RESPA), or may have engaged in Predatory Lending. In contrast, a “Loan Modification” company is unlicensed and unqualified to provide you with this legal insight or representation. And they frequently charge as much or more than the cost of a competent legal opinion and subsequent representation.
Contact our office for a free no-obligation consultation.