Loan Modification - The Process
Loan modification has become the new buzzword in the mortgage marketplace. Many real estate professionals seem to agree that loan modification could be the answer to the current mortgage crisis causing homeowners to lose their residences to bank foreclosures. Loan Modification allows a homeowner to stay in his/her home as well as keep their FICO score intact. In short, loan modification helps homeowners avoid foreclosure on homes that cannot get otherwise refinanced because of the loss of value of the home or the less than perfect credit of the homeowner.
Consumers who attempt to contact their lenders directly in an effort to negotiate a loan modification usually do not succeed in getting the best possible terms. The highest success rates occur for those who work with real estate attorneys and other professional loan modification companies fully knowledgeable with RESPA and TILA guidelines.
Recent legislation at the state and federal level as well as some recent bank takeovers by the FDIC have made loan modification application rates soar. Unfortunately, most consumers on their own are having little to no success modifying their loan, unless it is just a forbearance agreement in which the lender allows the borrower to pay back any monies that are in arrears over time. This is hardly a loan modification and the late payments would have already adversely affected the homeowner’s credit and make it impossible for the homeowner to refinance.
Unfortunately, if you find yourself in the above-referenced situation, most companies that offer “loan modification services but are not law firms can only get you a forbearance agreement, and they do nothing to protect your rights. Many of the "Attorney Based" or "Attorney Backed" companies actually are not law firms nor will you be represented by legal counsel and you could find yourself unknowingly surrendering many of your legal rights by using such a company. The banks will not modify willingly and only an attorney can protect your rights and apply the right kinds of pressure to a Lender's legal department to get you the result you are looking for.
There are three key elements in any loan modification or loss mitigation process. Each is an area to negotiate depending of the borrower's unique circumstances.
The first would be adjusting the interest rate of the first or second mortgage to a lower one that would be manageable by the consumer.
The second would take into consideration any missed payments and penalties that are in the arrears, and structuring a repayment plan or putting those monies on the back of the existing loan.
The third and most difficult is if your loan is now worth more than your property. Getting the lender to write down principal balance can happen in the right circumstances, especially if there are predatory lending issues involved in your case. Again, preparing the right argument is key. Loan modification is an intense process and the Loss Mitigation departments at most lenders are understaffed to meet the monstrous demand of consumers who are vying for their attention from everything from late payments to foreclosures.
LoanReliefLawGroup.com has the experience and legal clout to bypass the loss mitigation department and work directly with your lender's attorneys, providing you with your best opportunity for success in the loan modification process.