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.

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.