Loan Modification

Now more than ever, mortgage companies and banks understand that if they do not provide revised loan terms or settle for a portion of the debt to be paid that they will more likely than not get any money. Banking institutions are aware of the declining housing market. They know that at a certain point, they have to take what they can get. Mortgage companies and banks want to avoid the cost of foreclosure and recovery actions. There are many options to prevent foreclosure if you act soon enough.

WHAT IS LOAN MODIFICATION?

Typically a loan modification is an adjustment to your existing mortgage note that allows you to restructure your loan and arrange for a forgiving of late payments. Modification may include “forbearance” of late payments and waiving the right to start the foreclosure process.

Forbearance is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her payments. A forbearance agreement is not a long-term solution for delinquent borrowers; it is designed for borrowers who have temporary financial problems caused by unforeseen problems such as temporary unemployment or health problems. Late payments are typically tagged on to the balance of the loan, and in most cases will increase your monthly payment.

Generally, loan modifications require the homeowner having a bona fide hardship that the lender can verify. If you are facing foreclosure or considering loan modification, contact the Law Offices of Alex Leon to discuss what the best foreclosure solutions are for you. We will negotiate on your behalf with the mortgage company to get your loan back in good standing. We understand the system, the foreclosure laws and the chain of events necessary to help you keep your home out of foreclosure. We will gladly walk you through them. Foreclosure won’t happen overnight. The foreclosure process typically starts after you fall behind on your payments for at least two months, and often three or four. That gives you time to try some alternate measures, such as loan forbearance, a short sale, short refinance, or a deed in lieu of foreclosure.