Mortgage Loan Modification Attorney Call Toll-Free: 866-MiamiLaw
www.themiamilaw.com
Loan Modification and Restructuring
A loan modification or loan restructuring is a permanent change to a loan contract. It is agreed to by both the lender and the borrower. Many borrowers today are faced with mortgage payments that they no longer can afford and having the home foreclosed upon. The goal of a loan modification or restructuring is to keep the borrower in their home and out of foreclosure. The process requires documentation of hardship on the part of the borrower and negotiation between both parties to come to a mortgage term that suits both parties. Our firm is here to help you through this process and negotiate the new contract terms on your behalf.
It is in the best interests of both parties that the home does not get foreclosed upon. Foreclosure is not a simple remedy for either party. The lender must go through the arduous task of foreclosing on and evicting the borrower, must assume responsibility of all fees associated with the property (association fees, maintenance, taxes) while at the same time must market the property for sale. The borrower is evicted from their home, their credit is severely damaged, and their familys security is compromised. There are no winners in the case of foreclosure. Our mission is save you from this outcome if at all possible. As lawyers we do not guarantee the outcomes of our cases or matters. We work tirelessly to represent our clients; that is how we earn our fees.
In a loan modification the lender modifies an existing loan in order to help the homeowner in a time of documentable hardship. The goal is to make the loan affordable for the borrower for the long term. It is the task of the borrower (or those representing them) to contact the lenders loan mitigation department and negotiate a new interest rate for a certain period of time. In the past, loan modifications have only been extended to homeowners who have fallen behind on their payments and had documented hardships. Today the lenders are more willing to work with borrowers than they have been in the past. Lenders are now working with more and more borrowers with documented hardships who are asking for help even if they are still current on their payments.
An important piece of the loan modification process is identifying and documenting your hardship. The lenders consider hardship on a case-by-case basis and your case may qualify. It is important that it be provable. We recommend our clients write a 1-2 page letter explaining their hardship to their lender. Examples of hardship include: loss of job, pay cuts, illness of the borrower or his family, death of the borrower or a death in the family, divorce or separation, unforeseen medical bills, and the borrower being called to military duty. There are many more situations which are considered hardship and you should to the best of your ability identify any and all that have affected you and you can prove. It is important that you be able to prove your hardship.
Most loan modifications involve rate adjustments and fixing the new interest rate for a stated period of time. Some involve restructuring an adjustable rate mortgage (ARM) into a fixed-rate mortgage. Some cases come in the form of changing the amortization schedule from a 20-year to a 30-year (or even 40-year) schedule. A handful of cases have even involved reduction of principal.
If you are able to afford your home but are having trouble affording the terms of your loan, a loan modification can help. One of the biggest questions that face borrowers seeking assistance is Can I afford the terms of the modified loan? This is the one of the main criteria the lenders have for working with borrowers in need. You obviously are having trouble now, otherwise you wouldnt be asking for help. The bigger concern is whether you can afford the new loan being offered. If you cannot afford the new terms, the lender will not help you. It doesnt do them any good to give you a lower rate that you still cant afford to make the payments on they would be doing you and themselves a disservice if they did.
Mortgage Loan Modification Attorney Call Toll-Free: 866-MiamiLaw
www.themiamilaw.com
