The current mortgage crisis is threatening millions of Americans’ ability to keep their homes and maintain their good credit.  Loan modification may enable you to keep your home by lowering your monthly payment to an affordable amount.

WHAT IS A LOAN MODIFICATION?

Loan Modification is an effective tool if you are behind on your mortgage and may save your home from entering foreclosure. With a loan modification, the terms of your mortgage are restructured, reducing your monthly payment and allowing you to remain in your home.

DO I NEED A LAWYER FOR A LOAN MODIFICATION?

Even if your personal attempts have failed, a lawyer may still be of service. Knowing what documentation is required, how to present it and whose eyes the documents need to get in front of are the keys to success.

Whether right or wrong, lenders are more willing to speak and listen to attorneys working on their clients' behalf than the clients themselves. Calls are answered and lost faxes are suddenly found. While a lawyer is not a prerequisite to obtaining a loan modification, a lawyer's assistance is certainly a valuable asset.

DO I QUALIFY FOR A LOAN MODIFICATION?

When modifying an existing home loan, lenders focus on whether you will be able to afford the new payment(s) upon modification.  Whether you will be able to afford the new payment is based on your gross income.

All sources of income are generally considered, including spousal income even if your spouse is not on the original loan. If you are unable to afford a fully amortizing mortgage at 5.00%/per annum, a loan modification may not be the proper solution.

WHAT CAN I EXPECT FROM MY MODIFICATION?

Each loan modification is unique, and the outcome is dependent on a myriad of factors such as the loan's history, the mortgage company, the value of the property, and the income of the homeowner.  However, the typical modification employed is converting an adjustable rate mortgage (ARM) into a fixed mortgage. Monthly payments may also be reduced by increasing the term of the loan (a 40 year fixed vs. a 30 year fixed).

However, the most common question asked is: will my principal be reduced? Certainly, every attorney worth his fee will attempt to reduce the principal owed on your mortgage. However, reductions in principal are not the norm and reliance on such a reduction should not be the sole basis for a loan modification.

WILL MY LENDER ALLOW A LOAN MODIFICATION?

With the increase in foreclosures and the economic stimulus package proposed by President Obama, lenders are more willing to modify existing loans.

The majority of the home loans needing modifcation today are were made by big banks such as CitiMortgage, Countrywide, JPMorgan, Wells Fargo, Washington Mutual and Bank of America and based on Fannie Mae and Freddie Mac guidelines.

If you have an adjustable rate mortgage (ARM) or 2nd mortgage with a high interest rate, a loan modification may be right for you. If you feel you are a candidate for a loan modification, contact us

so that we may begin taking the steps necessary to reduce your monthly payments and allow you to keep your home.