Loan Modification

The most common modifications to existing loans are lowering the interest rate, reducing the principal balance, 'fixing' adjustable interest rates, forgiveness of payment defaults & fees, or any combination of these. A Loan Modification can help home owners who cannot refinance existing loans, or afford their current mortgage payments. Obtaining mortgage and foreclosure help from a Law Firm, or Real Estate Attorney regarding delinquent home loans with increased mortgage payments can stop the foreclosure process.

A loan modification with a real estate attorney may offer a more favorable loan modification agreement than your lender will offer you directly. With the high volume of home loans adjusting to higher interest dates and increased payments, a loan workout with our Law Office and Staff can modify loan terms and payments quickly and effectively.

Obtaining loan modification help and proper legal advice from an Attorney will likely get you a better loan modification agreement with your lender and preserve your credit. If you are currently behind in your mortgage payments our service may help stop the foreclosure process and help you avoid foreclosure.

A loan workout plan must benefit both parties- the homeowner and the lender. You want to keep your home. Your lender does not want your home and be forced to go through the foreclosure process. However, the lender may not wish to accept your partial payment and threaten foreclosure if you are late or in default. We can offer foreclosure help and advice to homeowners that want to keep their best and largest investment-their home!

Currently, lenders such as Aurora, Citi Chase, Countrywide, GMAC, Litton, Wachovia and WAMU, and others, are offering loan modifications and are willing to modify loan terms. However, these lenders are severely overwhelmed with distressed homeowners phone calls and inquiries concerning their delinquent loan accounts, increased payments or recently increased adjustable rate mortgages.

If you are currently behind on your mortgage, a forbearance agreement may also be unaffordable and impractical. We can help stop foreclosure with a loan modification EVEN if your forbearance agreement failed.

We will negotiate for you to obtain the best results and advise your lender that the high cost of the foreclosure process may not be to their best interest in your particular situation. Our relationship with mortgage lenders and loan servicing companies allows us to circumvent overwhelmed and over worked loss mitigation personnel and negotiate directly with supervisors and managers to achieve a quick loan resolution.

       How Loan Modification Works

A modification to an existing loan made by a lender in response to a borrower's long-term inability to repay the loan. Loan modifications typically involve a reduction in the principal balance, interest rate or an extension of the length of the term of the loan. In some cases a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default or foreclosure.

A loan modification agreement is different from a forbearance agreement. A forbearance agreement provides only short-term relief for borrowers who have temporary financial problems, whereas a loan modification agreement is a long-term solution for borrowers.

Unfortunately, many people are coming to realize that losing their house to foreclosure is a real possibility. Home foreclosure in America today is at an all time high and is affecting many homeowners that never thought they could lose their home to foreclosure. Homeowners are feeling the burden of higher interest rates and a slowing and stagnant economy. A loan modification may be the only way for a homeowner to save the biggest investment, their home. Negotiating with the lender for a modification of your home mortgage is an overwhelming process for many. That is why retaining the services of an experienced law firm or real estate attorney, rather than resorting to a loan modification company is advantageous.

Today's real estate market is one of drastic declines in property values, locally and nationwide, coupled with tighter credit requirements. This combination makes it extremely difficult for someone facing an upcoming adjustment in their payments due to the terms of an adjustable rate mortgage. It is a bad idea to deal with your lender alone. Our Law Office and Staff will represent you in attempting to bring your mortgage lender to reasonable terms that make sense in today's difficult economy. We will fight to save your home and get you a payment you can afford. No matter what the reason, the sad truth is that millions of people are in the same situation.

Previously, if a homeowner fell behind on his mortgage payments, or was facing an increased adjustable interest rate, the first thought most people had was to simply attempt to refinance their existing loan(s). During normal times this may have been a good alternative. In today's market, this formula doesn't work. Between the decrease in real estate values and the tightening of credit, you cannot recreate the circumstances that existed when you made your previous loan .. Our Law Office and Staff will work to alter the terms of your mortgage to fit a workable solution between you and your lender.

There is no more time to waste, now that you have a viable solution to your mortgage problem. Save your home and protect your family. A licensed real estate attorney is the best solution. A loan modification company may not be the answer if you are in fear of losing your home.

        Short Sale

If you need mortgage help and have tried refinancing or a loan modification with your lender and both the loan work and refinance have been declined a short sale may be negotiated to avoid foreclosure. Our office can offer foreclosure help and explain the foreclosure process.

To sell your home in a short sale or offer a deed in lieu may be a solution and may allow you to walk away without a deficiency.
In real estate, a short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation.

A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing.

For the home owner, the advantages include avoidance of having a foreclosure on their credit history and the partial control of the monetary deficiency. Additionally, a short sale is typically faster and less expensive than a foreclosure.

In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. Lenders have a department (sometimes called "loss mitigation department") which processes potential short sale transactions. Typically, lenders do not accept short sale offers or requests for short sales until a Notice of Default has been issued or recorded with the locality where the property is located.

Lenders have a varying tolerance for short sales and mitigated losses. Most lenders have predetermined criteria for such transactions. Other distressed lenders may allow any reasonable offer subject to a loss mitigation's approval. "Red tape" is very common in short sales, similar to REO and HUD properties, requiring potentially multiple levels of approvals and conditions. Junior liens, such as second mortgages, HELOC lenders, and HOA (special assessment liens), may also need to approve of the short sale. Frequent Objectors to short sales include tax lien holders (income, estate or corporate franchise tax - as opposed to real property taxes, which have priority even unrecorded) and mechanic's lien holders. It is possible for junior lien holders to prevent the short sale.

While it is frequent, if not common, for lenders to forgive the balance of the loan in question, it is unlikely that a lien holder that is not a mortgagee will forgive any of their balance. Further, it is common for a lender to omit updating the zero balance and settlement option on the mortgagor's credit report, or even flat refuse to do so "due to their financial loss."

                 The Mortgage Forgiveness Debt Relief Act of 2007

If a lender decides to forgive, all or a portion of a borrower's debt, and accept a lesser amount, the forgiven amount may be considered as income to the borrower and may be subject to federal taxation.

However, after the signing of The Mortgage Forgiveness Debt Relief Act of 2007 by President Bush, other amendments and laws have been passed to eliminate such tax liability and permit the borrower and lender to work freely together to find a solution that is beneficial to both parties. This protection is limited to primary residences so consultation with a tax advisor is advisable to ensure that a borrower qualifies. A short sale usually does not adversely affect a person's credit report beyond documenting the short sale as "foreclosure proceedings started". But it can count negatively against a person's credit to about the same degree as a foreclosure by remaining on the credit report for 7 years and, may likely prevent the new mortgages during the same period of time.