Using an Attorney for the Best Loan Modification Results
There are basically three ways you can address your loan modification needs: Handling the situation yourself, employing a civilian (non-law firm) modification service and through an attorney-based service. The differences are simple. Most people contact their bank immediately when they start falling behind and begin getting payment due notices from the bank. A small percentage of borrowers have the ability to successfully modify their loan to the best outcome possible. If the bank does decide to help you it will be very minimal and probably end up causing the same problem to reoccur down the road.
The next step is either losing your home or calling a loan modification company. The first type of loan modification strategy is a company that does not include an attorney. These companies typically offer no better results than you could get yourself. Without the clout of an attorney on your side, the loss mitigation department of your lender will be less likely to entertain offers of compromise beyond a very narrow modification program. These “civilian” loan modification programs are likely going to help the problem in the short term but not fix the underlying issue. Their results include lowering and fixing your interest rate for a short period of time and often adding an interest only option or stretching your amortization to 40 or 50 years. While these organizations may be able to get results on your behalf, the benefits they produce are drastically less than what an attorney will accomplish.
Attorney-based loan modifications clearly deliver the most beneficial results to the homeowner. The major difference is that the attorney will find predatory lending violations in your loan documents and threaten a lawsuit against the lending institution if they do not comply with the proposed modification. Depending on your specific situation, the attorney may demand a balance reduction if you are upside down, an interest rate reduction, fixing the rate, first payment deferment for a few months, and, if requested, a change in the terms of the loan (i.e. stretching out the repayment period to further lower the payment). When the attorney finds a violation, there may be a fine plus attorney fees due from the lending institution. The attorney will break down what it is going to cost the bank over the cost of the lawsuit versus the modification proposal. This is how the numbers can work so heavily in your favor.
A very wide variety of homeowners will qualify for an attorney-backed loan modification program. With so many questionable loans being sold over the past few years, it is no wonder that so many homeowners are facing mortgage challenges. If you get the right attorney who knows how to handle this situation, you can have your balance reduced substantially which also lowers the monthly payment and delivers the best possible loan modification results in the shortest amount of time.