What Can A Loan Modification Attorney Do For Me?

Finding yourself at the mercy of a mortgage company that wishes to foreclose upon your home is never a good situation. Working with customer service reps at various companies can often be frustrating and pointless. It seems that each person you speak with may provide a different answer and outcome to your individual situation. You waste time and energy getting nowhere, while the time for handling the crisis is quickly running out. You know that you need a loan modification to save your home, but you do not know how to accomplish this important task.

A loan modification attorney could be your answer. Attorneys, who are qualified to deal with mortgage companies and experienced enough to know the tricks of the trade, could help you save your home. A loan modification can make the difference between keeping your beloved home and being forced into an apartment, or worse.

A loan modification attorney can assist you in dealing with the mortgage company. They can ensure that all the paperwork is processed properly and on time. They can assist you in making sure the repayment plan is one you can easily afford and still keep your home.

Loan modifications could be the only way to lower your monthly payment, bring your mortgage into current status again and lower your interest rate. When you use the services of a loan modification attorney you may also be able to have some of the interest payments waived, roll over past due payments to the end of the loan and, possibly, reduce the amount of your overall debt. These are things that can be done, when handled by a professional.

Attorneys are trained negotiators. They know and understand the rights of their clients and will push the mortgage companies to comply with these rights. The mortgage company has the ability to renegotiate a mortgage. However, they may encourage their service representatives to pass up on negotiations and head straight for foreclosure.

A loan modification attorney could help you at a time when you are most vulnerable. An economy that is not quite stable brings about hardships in many forms. All too often, people who would not normally be in this situation, find themselves about to lose their homes. Many of these foreclosures could have been avoided had the home owners utilized an attorney and the loan modification program.

If you have found yourself in this predicament, there is help available. Loan modification attorneys could help you save your home.

Loan Modification: How Much Can You Save?

Loan modifications are designed to make mortgages more affordable for homeowners. Whether you get an interest rate reduction, a term extension, or a principal forgiveness, the point of getting your loan modified is to reduce your payments so that you can more easily afford it. But how much does a loan modification really save you?

Nationwide, the average homeowner saves $812 a month after a loan modification. Of course, this is far from indicative—the figures can vary from a couple of hundred to several thousand dollars. Below are some of the factors that affect your potential loan modification savings.

Debt-to-income ratio
This number indicates how much of your monthly income goes into debt payments. This includes not just your mortgage, but also your credit cards, student loans, car loans, and other debts you currently have. Most banks will try to fit your monthly payments down to 31% of your debt-to-income ratio, the standard set by the government.

Principal balance
The amount you currently owe is probably the biggest factor in your loan modification payments. For a loan modification to make sense to your lender, your monthly payments must be a reasonable percentage of your balance. Generally, the larger the unpaid amount, the more the bank loses in a loan modification and the smaller your chances of approval.

Type of modification
The most common form of loan modification is an interest rate adjustment. By lowering your interest rates, the bank reduces the amount you pay every month without reducing your principal. The government allows interest rates as low as 2% on a loan modification, if it means bringing the payments down to affordable levels.

Other structure types
If reducing your interest to 2% does not help, your lender may propose other ways to bring your monthly payments down. A common alternative is a term extension, wherein your payments are spread out over a longer period. In some cases a lender may also reduce the principal itself, although this isn’t common in the loan modification market.

Loan modification alternatives
Some homeowners are simply too far behind or are in too much hardship to afford the payments, even after a loan modification. In this case, lenders usually offer other ways to prevent foreclosure, such as a short sale or a deed-in-lieu. These won’t let you keep your home, but they let you get rid of the heavy mortgage without the stress and damage of a foreclosure.

Getting a Loan Modification for Your Second Mortgage

Last year, getting a loan modification for a second home was close to impossible - with two different parties holding stake, there wasn’t much chance for a second mortgage to get approved. But thanks to new changes in President Obama’s home loan modification program, people who have second mortgages in default can now get the help they need. Read on to learn more about getting a federal loan modification for second mortgages, and how you can make the most of it.

Who’s in it?
The program is voluntary, but most major lenders have already signed up and more are expected to join in. To find out whether your lender is taking part, call up the bank’s loss mitigation department—it’s the office that usually takes care of loan modification plans. If they’re not part of it, chances are they offer a different program for second mortgages.

How does it work?
The government encourages lenders to participate by offering a $1,500 incentive for every home loan modification they approve. Upon getting approved, borrowers will also get a $500 upfront payment and additional $250 over the next three years, credited against their outstanding balance, provided they do not default again during the period.

How does it change my mortgage?
The home loan modification can reduce your interest rate to as low as 1% for as long as five years. The numbers may vary according to factors such as your income, your current balance, and your payment history. Other loan modification plans also exist, such as a principal reduction or an extension of loan terms. The type of assistance you get depends on how well you can negotiate with your lender and the current state of your mortgage.

How do I qualify?
The qualifications for a second home loan modification are more or less the same as for a primary home. First of all, you need to present a valid hardship to justify falling behind—a medical emergency, job or income loss, or a death in the family. The lender will most likely assess you based on your debt-to-income ratio—the total amount of debt you have versus your total monthly income—so you may also need to present a source of income.

Getting a second loan modification can be complicated, but it’s not difficult. If you’re considering a home loan modification on your second mortgage, you may want to work with a loan modification attorney—a professional who can guide you through the whole process from application to signing day. Look for one with specific experience in your area and property type, and make sure to plan ahead to ensure the best results.

Bank of America Loan Modification Tips

As one of the leading mortgage lenders in the country, Bank of America is also one of the first to support the government’s mortgage loan modification program. Homeowners who have trouble keeping up with their mortgage can now get their loans restructured to more comfortable terms, allowing them to stay in their homes and avoid foreclosure. If you’re considering a Bank of America mortgage loan modification, read on for some tips and tricks to help you get the best deal.

Make the call. The first step to any mortgage loan modification is to call the lender yourself. Bank of America handles loan modification applications through its Loss Mitigation department, so make sure you have the right person on the line. It may take a while since the bank receives thousands of requests a day, but waiting is part of the process—it just takes a bit of patience.

Hire a lawyer. One of the best ways to ease up the mortgage loan modification process is to work with a loan modification attorney. For one thing, he or she will already have links with local banks, so it’s easier to get to the right people. They can also help you decide what terms to demand, how to negotiate your case, and what alternatives to consider in case the mortgage loan modification doesn’t work out.

Gather your documents. A lot of paperwork goes into mortgage loan modification, and most of them have to do with your finances. Bank of America will want recent financial statements, pay stubs and other proof of income, tax forms, and your mortgage bills for at least the past two months. Make sure to have all these on hand before handing in your kit; otherwise your application could be significantly delayed or even rejected.

Write a hardship letter. The hardship letter is another important element in your mortgage loan modification. This is where you get to tell the story behind all the paperwork. Talk about how you lost your job or had to pay medical bills, and more importantly, explain how you plan to get back on track now that the hardship is over. Your loan modification attorney can help you draft the letter to meet the bank’s standards.

Stay in touch. It’s important to stay updated once your application is in. Not only does it ensure that things are moving; it also shows the bank that you’re motivated and willing to work your way out of financial trouble. Call up the bank around once a week to ask about your application, and make sure to keep a record of every correspondence you receive.

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.

Prepare a Winning Loan Modification Application

Loan modification has no doubt won its place as the best way to avoid foreclosure and get one’s mortgage back on track. But the fact is that not every loan modification application gets approved, and even completing the paperwork may not be enough to qualify. At the end of the day, it’s a question of whether or not a loan modification will make financial sense to the lender, rather than what’s best for you.

But that doesn’t mean your loan modification application is out of your hands. Below are some steps you can take to ensure a successful application with your bank.

Start early.
Before the program was popularized, borrowers typically had to be at least 90 days in default to apply for a loan modification. However, with new government policies, anyone can now submit a loan modification application, even if their mortgage is current. As soon as you start having difficulty making ends meet, call up your lender and ask about your options. That way, you can start finding solutions before it gets too complicated.

Do your research.
Most loans today are either owned by one lender or converted into mortgage-backed securities, which are basically “pieces” of the mortgage distributed between several investors. Mortgages that fall under the latter are harder to modify because there are more parties concerned, each of which has to approve the loan modification application. Find out who owns your mortgage by calling your bank or looking it up on government websites.

Write a convincing letter.
The hardship letter is one of the main requirements in a loan modification application. It’s where you explain to your lender how you fell behind and convince them that you can stay current once the loan is modified. Make sure to keep everything factual—you can appeal to emotion by drawing attention to certain details, but you can’t exaggerate or twist the facts. Most importantly, keep it brief but detailed—too short and you can’t really explain much; too long and the agent won’t even want to read it.

Work with the pros.
If you’re not sure you can do it yourself, consider hiring a loan modification attorney. He or she can help you make quicker contact with the lender, prepare your loan modification application, and give you advice on staying on track once your loan is modified. It may cost more at the outset, but the assurance and convenience it offers can be well worth your money.

Getting a First Horizon Loan Modification

First Horizon is one of the most established financial servicers in the United States, having been established in 1834 and playing a big role in the recent sub-prime mortgage boom. Today, it is also among the most active providers of loan modification, a process that allows struggling homeowners to get more comfortable mortgage terms. If you're looking to get a First Horizon loan modification, read on for a simple borrower's guide.

Qualifications
As with any other lender, the main requirement for a First Horizon loan modification is a valid hardship that justifies the borrower's falling behind. A borrower may apply for loan modification without being in default, as long as he or she can prove difficulty in meeting monthly payments. Adjustable-rate or high-rate mortgages are good candidates for loan modification. Other parameters include:

-a stable income
-ability to afford the reduced rates
-clear bankruptcy record (i.e. the home should not be in bankruptcy)

Hardship letter
One of the first things the lender will require is a hardship letter, wherein you explain the nature of your hardship and justify your loan modification request. Valid reasons include medical emergencies, job loss or income loss, divorce, or a death in the family. Make sure to keep your letter factual and simple--agents go through thousands of letters a day and lengthy texts are likely to be pushed to the back.

When should one apply?
The simple answer is as soon as possible. Most people who need loan modification are already in danger of foreclosure, so time is of the essence. As soon as you miss a payment or foresee financial difficulty, you can call up the bank and start comparing your options. Remember, thousands of other borrowers are seeking a First Horizon loan modification, so the earlier you get started, the faster you can get back on track.

How are loans modified?
A First Horizon loan modification can come in any of several forms, depending on what makes the most financial sense. The most common types are:

-reduction of interest rate;
-change from an adjustable-rate to a 30-year fixed-rate mortgage;
-extension of loan terms;
-distributing late payments and penalties to monthly payments; and
-direct reduction on the principal (usually offered on homes with negative equity).

If the borrower doesn't qualify for loan modification, he or she can also look into other solutions that can minimize the damage or avoid foreclosure. One of the most common alternatives is a short sale, where the home is sold for less than the value owed and the proceeds paid to the bank as full payment. Consider working with a loan modification attorney to increase your chances of approval and learn more about your loss mitigation options.