Mortgage Loan Modification
Guiding You Through the Loan Modification Process
Need an attorney for a mortgage loan modification case in Hackensack? When you are looking for an alternative to bankruptcy, or bankruptcy alone cannot provide the long-term solution to enable you to keep up with or your mortgage payments long-term, you should consider applying for a mortgage loan modification. The financial benefits realized by homeowners approved for mortgage loan modifications can result in savings of more than $1,000.00 per month on their monthly payments. Savings over the entire term of a modified mortgage often vary anywhere from $100,000.00 to $200,000.00. Although the federal government's Home Affordable Mortgage Program, commonly known as "HAMP" has been phased out of existence years ago most mortgage lenders have their own in house procedures for granting homeowners mortgage modifications, which at times could be as favorable or more favorable than the federal government’s prior HAMP program.
It should be noted that mortgage modifications are voluntary in nature. Mortgage lenders have no legal or mandatory obligation to approve any homeowner for a modification, however, mortgage lenders and their servicers who do except mortgage modification applications (and the vast majority of mortgage borrowers are at least eligible to apply for mortgage modification) must adhere to the strict procedures set out by the Consumer Financial Protection Bureau (“CFPB”). Keep in mind there are other loss mitigation remedies such as a “deed in lieu of foreclosure” and/or a “short sale” but potential loss mitigation alternatives involve the eventual transfer of your home to the mortgage lender and/or third-party - these alternatives do not involve maintaining homeownership and possession.
Prospective Benefits of a Mortgage Modification
The mortgage lender may choose to modify a delinquent loan in several different ways. Usually a lender will provide relief to the homeowner in one or more of the following ways:
- Lowering the interest rate. If approved, a borrower’s interest rate is often lowered to the best mortgage rate available to mortgage borrowers with good credit at the time of modification approval.
- All mortgage arrearages existing at the time of approval are almost always either capitalized (added) into the new principal balance of the modified mortgage, the mortgage arrearages are usually added as a balloon payment at the end of the mortgage loan, with little or no interest accruing on the arrears itself.
- Lenders often will extend the term of the mortgage and/or calculating the new payments based on a 40 year as opposed to a 30 year payment schedule in order to further reduce the homeowners new monthly mortgage payment under the modified mortgage in order to make the new, modified, mortgage payment affordable.
- Though not common, the mortgage lender may consider reducing/forgiving part of the arrears and/or even part of the principal balance die on the mortgage loan when there is negative equity securing the mortgage; that is when the fair market value (“FMV”) of the home is lower than the amount owed on the mortgage.
Who is Eligible for a Loan Modification?
Most homeowner(s) who are either behind on their monthly payment obligation and have little to no equity remaining in their residence will likely be eligible to apply for a modification to prevent and/or stop foreclosure actions filed against their homes. There are several substantive factors such as household income, the amount and how long homeowner(s) have been delinquent on their mortgage(s), all of which will be factors to be considered by individual mortgage lenders and/or their servicers with regard to their decision whether or not to grant a mortgage modification.
Mortgage Modification Consultation
At the consultation Mr. Alster will personally review the necessary financial information the lender would be prospectively be considering in their decision as to whether or not to grant a modification. If necessary, Mr. Alster will try to contact the mortgage lender or servicer directly via the phone to make sure the homeowner is eligible to apply for a modification.
Processing a Mortgage Loan Modification Should Not Be a Do It Yourself Project.
Why Do You Need an Attorney for Loan Modification?
As indicated above, the vast majority of mortgage lenders and their servicers have one or more of their own modification programs that bars can apply for (depending on the policies set by the owner of the individual mortgage). Either way working with the mortgage company is often procedurally extremely difficult. Usually, homeowner(s) wishing to modify their mortgage(s) often get frustrated as result of being shuffled around from person to person when they try to communicate with their mortgage lender or mortgage servicing company, bombarded with numerous and conflicting letters, etc. The process is usually frustrating and labor intensive. Also, specific financial information and how it is presented can be very sensitive and determine whether a lender and/or servicer grants the modification application.
The cost to retain The Law Offices of Marc G. Alster for a mortgage modification usually amounts to somewhere between one and 2 monthly mortgage payments; the mortgage loan modification consultation with Mr. Alster is completely free with homeowner(s) having an extremely high likelihood of success if confirmed as eligible to apply by the mortgage lender and approved by Mr. Alster. For these reasons, it is strongly suggested from both a procedurally and substantive standpoint, that an experienced attorney, skilled in applying for mortgage modifications, be retained.
While Mr. Alster cannot guarantee the outcome of a modification application, having an experienced attorney, who has been representing and applying for modifications since modifications first became popular many years ago, can greatly increase a homeowners’ chance of having their modification approved.
Anytime a borrower is facing foreclosure or a situation where they are unable to make their mortgage payments, it is a serious problem. We understand not only the financial impact this type of situation can have on a family, but also the emotional toll it can take. Let Mr. Alster offer you his expertise in loan modification matters, which also usually requires homeowners to consider the potential for filing for Chapter 13 bankruptcy relief. To determine which way is the best way to proceed for you, please call (201) 878-4630 or contact us today.