Avoid Foreclosure With Loan Modification

As more and more people fall into default and risk losing their homes, the government has come up with numerous ways to help them avoid foreclosure. Among the most popular approaches is loan modification, which basically involves changing the terms of one’s mortgage to make it more manageable. With a good loan modification program, you not only get to stay in your home—you also get your finances back on track. This article offers more reasons to call a loan modification lawyer and get started today.

Stay in your home
Obviously the biggest advantage of a loan modification is that you get to keep your home. You don’t have to worry about relocating, nor do you have to suffer the social stigma of a foreclosure. And since you don’t have to take out a new mortgage afterwards, you’re open to other financial options in the future. As soon as you’re back on your feet, you can start applying for new credit and improving your portfolio over time.

Choose your terms
There are several ways a loan modification can be done: lowering interest rates, forgiving part of the principal, cancelling late fees and penalties, or extending the life of the loan. With a good loan modification lawyer, you can negotiate with your lender for terms that really fit your needs, rather than just reduce losses on their part. To make sure you get the terms you need, set clear goals at the outset and take time to plan it out with your lawyer.

Get government support
The government is currently vamping up its efforts to avoid foreclosure, and this includes encouraging lenders to modify loans. Both prime and sub-prime mortgages, as well as second mortgages, are now eligible for loan modification assistance. Lenders are also given more incentive to help troubled borrowers avoid foreclosure. Ask your loan modification lawyer about government loan modifications and see how you can qualify.

Save your credit
Other loss mitigation options, such as short sales and forbearance, have a negative effect on your credit report. While they’re not as drastic as a foreclosure (which can last up to ten years), they still take a good amount of time to clear up, and that can further keep you from becoming stable. Loan modification leaves little to no signs on your credit, so you can start rebuilding your finances—or even take out new loans—as soon as it’s approved.

What is Predatory Lending?

Author: CDLoanmod

Predatory Lending is a practice wherein a lender forces you into abusive or unfair lending terms. This can be in the form of high interest rates, unreasonable penalties, and hidden fees that aren’t part of the mortgage contract. Often, the contract is written out so that it’s all but impossible for the borrower to get out of it, even when it puts them under financial stress. In fact, studies show that most of today’s foreclosures and defaults can be traced to some form of predatory lending.

How do I know I’m a victim?

Many predatory mortgages are so subtle that the borrower doesn’t know it—until things get out of hand and they’re facing foreclosure. But the earlier you take action, the faster you can set things right. Here are some signs that tell you if you’re on the losing end of the deal.

• Excessive fees. Some fees can be financed but are not directly affected by the interest rate. This makes them easy to disguise or manipulate. Fees below 1% of your loan amount are usually no cause for concern, but if they add up to more than 5%, you should get suspicious. 
  
• Prepayment penalties. It’s common for lenders to charge you a penalty if you pay off your loan in advance. This is to make up for the interest they lose by letting you off early. The penalty is considered abusive if it’s effective for more than three years or is worth more than six months of interest.
• Yield Spread Premiums. This is a fancy name for the kickbacks your lender pays a broker to steer you into a high-interest or sub-prime loan. If you see this term on your bill, you’re probably paying more interest than is legally acceptable.
• Refinancing offers. If your lender offers you a tempting refinance package, think twice about it. It may be a form of loan flipping, a practice they use to generate income without giving you any tangible benefits. In the long term, the refinance can simply drain your equity and increase your monthly payments.
• Mandatory arbitration. This is one of the most common predatory practices. Mandatory arbitration is a provision in many contracts that bans you from going to court if you find the terms abusive. You’re basically being denied of your rights to justice.

What are my rights?

Most cases of predatory lending violate the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). These laws were put in place to protect borrowers like you, but lenders continue to violate them every day and trick millions of people out of their money. The best way to protect yourself is to know these laws and the rights they give you.


For one thing, you always have the right to speak up whenever you feel you’re being cheated. Sometimes it’s as simple as calling your lender and asking them to explain vague or overly high charges. They may or may not give a useful answer, but it’s important to let them know you’re not being fooled.


Even if you’re already in foreclosure, there are always steps you can take to correct the situation and save your home. Find a competent lawyer to help you out and look for RESPA and TILA violations in your contract. In most cases, the laws can help stop foreclosure and even give pay you back in damages.


What can I do?

If predatory lending has put you in serious financial trouble, one thing you can do is apply for a loan modification. This is a simple way to restructure the terms of your loan into something more reasonable and helps you stop foreclosure. All you need to do is call a loan modification attorney, a person who specializes in talking to lenders and negotiating for proper mortgage assistance.

You will have to provide some documents so that they can properly assess your case, including a hardship letter that explains your situation. Your Loan modification attorney can use violations to negotiate better settlements with your lender. These may include misleading disclosures, exorbitant fees, or any of the signs mentioned above. Nearly every mortgage has at least one violation, but it takes a good understanding of the law to point them out.

After submitting your application, your attorney will start negotiating for better rates. When needed, they will use RESPA and TILA violations as leverage for getting the best loan modification offers. When it’s approved, you’ll receive a document detailing the mortgage modification, whether it’s a a lower interest rate, or some form of mortgage assistance. Once you approve it, you can keep your home and start paying off your mortgage at a comfortable pace.
About the Author:
The Loan Modification Department is composed of a team of attorneys, mortgage and real estate professionals, and hardship analysts. Our lead attorney is Christian M. Dillon, an experienced lawyer specializing in loan modifications and RESPA and TILA violation cases.
For a Free consultation talk to our Loan Modification Lawyer or go through the Loan Modification FAQs

Article Source: ArticlesBase.com - What is Predatory Lending?

Foreclosures Also Put Renters At Risk

As increasing numbers of rental properties fall victim to the housing crisis, renters are finding themselves equally at risk as homeowners. Real estate data provider RealtyTrac reports that rental foreclosures have almost doubled since January in some cities, leaving thousands of tenants hanging.

According to the nonprofit Oregon Law Center, renters are often unaware of their risk for eviction and usually have no reason to expect it. There have been cases where renters had to be evicted prematurely, even if their leases were still good for several months.

Studies by the National Low-Income Housing Coalition show that about one-fifth of all foreclosed properties are occupied by renters. Some states have addressed the problem by proposing laws to protect renters in the event of foreclosure, but few have been actively pursued.

In Oregon, such a law is scheduled to take effect later this month. Under the law, tenants will be allowed to stay in foreclosed properties for the duration of the lease, or 90 days after the auction date if they are on month-to-month terms or if the buyer intends to use it as a primary residence. Renters also have the option of applying their deposit to their last few months of stay, provided they formally inform the owner of their intent to leave.

The law will also require foreclosing entities to inform both the landlord and the tenants as soon as the foreclosure process begins. To get protection, renters will have to submit a copy of their lease or rental agreement to the bank at least a month before the foreclosure date.

Prior to the law, tenants were only given 10 days to leave the property after the home is sold off. Experts say it is impossible for some renters to obtain the funds for moving, including the security deposits and utilities, in such a short time.

Check out the State Foreclosure Laws or talk to a loan modification specialist to discuss your case.

Foreclosure Freezes Didn't Help Borrowers | Foreclosure News

Foreclosure Freezes Didn't Help Borrowers | Foreclosure News

The foreclosure moratoriums imposed by several lenders late last year did little to stop the rise of mortgage defaults and may even have worsened the problem, due diligence analyst Clayton Holdings said in a report today.

According to the report, 93% of the cases stalled by the moratorium still went into foreclosure by April, as soon as the ban was lifted. Many were also moved to real estate owned (REO) status, wherein the property is effectively owned by the bank.

For servicers who did not impose a foreclosure freeze, 89% of the cases expected to end in auctions by March remained in the foreclosure process or in REO.