Do I Need or Should I Retain an Attorney When Applying For a Mortgage Modification?
Homeowners and other real property owners (hereinafter "borrowers") in default on their mortgage payment obligations can represent themselves in connection with the filing of their own home mortgage modification applications (hereinafter "mod applications"), however Mr. Alster, strongly suggests, for both important substantive and procedural reasons, that homeowners retain a professional who handles the mortgage mod applications on a regular basis to represent them if it is financially possible.
On a substantive level, there are many factors that go into a mortgage underwriter's decision as to whether or not to grant a Loan Modification, and what terms to offer in the modified mortgage, i.e. the new interest rate, whether the mortgage arrears will be capitalized into the modified mortgage, and in some cases, whether any part of original principal balance will be forgiven. For obvious reasons an attorney such as Mr. Alster, who has been applying for and procuring mod applications for clients since they first became popular prior to Barack Obama's 1st presidential term, is in a much better position to be aware of all of the substantive factors underwriters will likely consider in making their decisions then a homeowner who likely submit a single mod application in his/her lifetime. A seasoned professional, such as Mr. Alster, will know how to best present the pertinent financial information to the lender, and how the borrower's- pertinent financial information is likely to interplay with other factors to be considered by a lenders' underwriters, who make the ultimate decisions on all mod applications.
In addition, from a procedural stand point, how to best the borrowers' pertinent financial information to the lender or servicer is an art as much as it is a science. The application process itself presents a procedural morass to many homeowners and sometimes to even the seasoned professionals; often this depends on the identity of the lender and/or its servicer, and whether the subject mortgage was sold to a new lender or assigned to a new servicer. This procedural morass can often amount to a "minefield" for many 1st or even 2nd or 3rd time Pro Se mod applicants (mod applicants who represent themselves). Huge lenders such as Bank of America and Wells Fargo, among others, are especially notorious for having negative reputations in this area. A borrowers' original pertinent financial information, timely provided to the lender/servicer, can easily become stale and often has to be updated to lenders two to three times before a decision is made. In some cases the borrowers' original financial documentation submitted to the lender/servicer supported a positive decision, but due to the application not being complete and/or do to the procedural morass many mod applicants are confronted with (no fault of themselves), the original documentation becomes stale and approval is denied based on the borrowers' updated financial information which no longer supports a positive decision by the servicer/lender. This procedural morass can simply be due to the lenders losing/misplacing some of the borrowers' original financial documentation or the lenders/servicers simple failure to make a timely decision on a "substantially" complete and accurate set of financial documents. The aforesaid example is just one of many procedural pit falls mod applicants and their attorneys may have to face which can cause a lender/servicer to make a negative decision on a borrowers' application to no fault of the borrower. R homeowner or no substantive reason is based on the applicant's financial information.
Legal fees for a mortgage modification are likely going to amount to one or two of mortgage payments, while the financial gain the borrower stands to reap from being approved for a mod application usually amounts to greater than $50,000, and more often than not amounts to hundreds of thousands of dollars when compared to the payment terms of the original mortgage. For these reasons, more often than not, the fee paid to a professional such as Mr. Alster to handle the Mod Application often amounts to the best investment homeowners/borrowers who are in need of a modified mortgage will ever spend.