Over my more than 45 years of practicing law, I’ve often been contacted by potential clients who ask if an attorney can help them negotiate a loan modification with their lender. The answer to that question is yes, that falls within the purview of what a practicing attorney can do.
You, the potential client, should ask the lawyer about their level of experience with loan modifications, since not all attorneys are experienced in negotiating them. For the reasons discussed below, I can’t overstate the importance of hiring an attorney who is experienced in representing clients in applying for a loan modification.
What Is A Loan Modification?
- A loan modification is a means of negotiating a reduction in the amount of your home loan principal or monthly payments if you’ve fallen behind in your payments.
- Loan modification is much different from a refinancing plan or a forbearance agreement.
- With a refinancing plan, the homeowner applies to a lender for a new loan. If the loan is approved, the money is used to pay off your existing mortgage. You will then be required to pay off the new loan according to the terms entered into by the parties. However, if you are behind on your mortgage payments or if your property is in the foreclosure process, there is a possibility your refinancing request will be turned down.
- With forbearance agreements, the mortgage payments are temporarily suspended or reduced. However, to obtain one, you need to have suffered some type of financial hardship. The total amount of your monthly payments is not reduced. The forbearance is meant to be effective for only a short period of time.
- If the mortgage company agrees, a loan modification can result in an adjustment in the interest rate, the length of the loan or other factors discussed below in more detail.
Why Request A Loan Modification?
- Under the appropriate circumstances, requesting a loan modification is one of the ways for a homeowner to save their home should they fall behind on their mortgage payments.
- If a loan modification is approved, the amount of your mortgage payment will be reduced. You, the homeowner, can resume making the reduced mortgage payments, avoiding foreclosure, and keeping your home.
- In some cases, the past due payments might be added to the end of the mortgage, thereby extending it.
- In other cases, the past due payments you owe may get forgiven,
Reasons Why A Lender Would Agree to A Loan Modification?
- Lenders are in the business of making loans and not in the business of owning property.
- There are expenses involved in taking the title to your property.
- The property needs to be maintained until it is sold. This could involve hiring a property management company as well as a realtor. Neither of these professionals work for free.
- The foreclosure process can be long and drawn out. The lender will need to retain the services of an attorney to file the foreclosure paperwork and represent the interests of the lender in court.
- An experienced lawyer who is knowledgeable about loan modifications can stand in your shoes and negotiate with the mortgage company on your behalf to work out a deal with the lender to avoid foreclosure.
- A lawyer will advise you of the options available to you and further advise you as to which ones have the greatest chances of success.
Loan Modification Help In Greater Fort Lauderdale
If you are behind on your mortgage and need to pursue a loan modification, contact the Law Offices of Gary I. Handin at (954)796-9600 or toll-free at 1-877-815-4560 to schedule an appointment for telephonic consultation. Although we all are currently going through difficult, trying times, we are available to answer your questions. Stay Safe!