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If you are having difficulty paying your mortgage, you may qualify for a loan modification. What is a loan modification? It is a change in the terms of an existing obligation – usually the interest rate. A loan modification is not a refinancing or new loan. So, even if you have less than perfect credit, you may still qualify for a loan modification since you are not required to re-apply for a loan.
While there are some good loan modification programs out there, including the government sponsored Making Homes Affordable Program (“HAMP”), it is important to remember that the law does NOT require a lender provide a loan modification to anyone. To be sure, the process of modifying a home loan can be slow and frustrating. Many homeowners simply give up. However, for those who persist, the benefits are undeniable.
A HAMP modification will generally lower the borrower’s interest rate to 2% per year for five years, after which time it will slowly increase to around 5%. The difference in monthly payment of a modified loan versus an unmodified loan can easily top one-thousand dollars per month. This can make all the difference between being able to afford the property or not. Moreover, a modified loan will become current as the “arrears” or past-due amount will generally be added back into the principal and paid at some point in the future – presumably after property values have increased.
The process of seeking a loan modification is arduous. Many people find that the lenders seem to repeatedly “loose” their paper work and that any one small misstep can result in a denial of the request. While some have managed to complete the loan modification process without help. Most people find that it make better sense to work with a qualified professional who has the expertise to package the loan modification application in such a way as to maximize the chances of success.
At Speckman Law Firm, we can refer you to someone who has demonstrated professionalism and a good success rate or we can help you complete the loan modification package yourself. When done within the context of a bankruptcy, many of our clients find that there are little or no out-of-pocket expenses involved in the loan modification process. Outside of the bankruptcy process, you are not required to pay any money until the work is completed.
This is your home – fight for it. Call us today to schedule a free consultation with Attorney David Speckman to see if you might qualify for a loan modification with your lender.