A very large part of what this law firm does, along with Foreclosure Defense and Florida Foreclosure Surplus and Tax Deed Surplus funds, is Loan Modifications. I feel this is the best long-term solution in defending against foreclosure. But how does a Loan Modification work?
Wanting to obtain a Loan Modification means that you have gotten behind on your mortgage payments and you are trying to get back into making the payments again. This means that all missed payments, escrow, interest, the lender’s attorney’s fees, etc. will get added up and put to the back of your original loan in some capacity. The lender will then give you a new payment and interest rate based on your debt to income ratio. Most of your larger mortgage companies have the ability (and desire) to do a Loan Modification because it actually saves them money in the long run.
By the lender agreeing to modify your loan, they will be helping you to stay in your home, as well as it gets them back to making money. Most mortgage companies are going to make a great deal of money from the interest off a 30- or 40-year mortgage. If they follow through with a foreclosure case and eventual sale of your property, the lender may end up losing money if the property sells for less than what you owe. Most often it is in their best interest (and yours) to modify the loan rather than continuing a foreclosure action. This doesn’t mean it is easy to get a Loan Modification though.
In order to obtain a Loan Modification, there is a process. You must fill out an application and also send in supporting documents that show your current income and what your expenses are. This will help the lender determine your debt to income ratio. These supporting documents could be anywhere from 30 pages to more than 200 pages depending on your income and assets. This is why it is important to hire someone to help with this Loan Modification process.
Once the documents have been sent to the lender, they will look it over for completeness. If they need additional documents, they will let you know. If the application is deemed to be complete, they will then look it over in greater detail to determine if they can give you a modification that is affordable to you. In some instances, they must also follow the rules laid out by some federal agencies if your loan is federally backed (HUD, VA, etc.). If they approve you for a Loan Modification, then you will typically get a Trial Payment Plan that consists of about three months of payments. This trial period is to make sure you can actually afford to make the new mortgage payments. Once you have made all of the required trial payments, the lender will give you a Final Modification to sign and if they have filed a foreclosure case, they will have it dismissed.
The biggest thing to watch out for with doing a Loan Modification is scams. Yes, there are many companies out there that try to help, but there are even more that are nothing but scam artists who make promises of loan modifications and don’t deliver. Any company that says they can guarantee a Loan Modification is an absolute scam. There are never any guarantees for something like this because you can’t force the lender into a new contract. The lender must be willing to grant you the modification. If you receive a letter or postcard in the mail from someone claiming they “guarantee” they can modify your mortgage and reduce your payments, you can bet it is a scam.
Hiring a qualified attorney to help you with the Loan Modification process helps you in many ways. I can go over your documents and help with the wording and make suggestions that will increase your odds of successfully modifying your loan. During the Loan Modification process, I am generally also hired to defend the client in their pending foreclosure case. This means that I am already in constant communication with the lender’s attorneys. The lender’s attorneys are a great resource to communicate back and forth with the lender. If you are trying to speak to the lender on your own, you may never speak to the same representative twice. In fact, many of my clients come to me after months of trying to communicate with their lender and trying to get a loan modification, only to get increasingly frustrated over the lack of communication. I am able to help most clients with obtaining a Loan Modification, and those few who cannot get one, I can usually help in some other way.
Loan Modifications really are the best long-term solution, but it is often a daunting task to handle by yourself. If you are facing foreclosure during (or because of) the current pandemic and want to try a Loan Modification, please give me a call for a free consultation and evaluation of your case. I handle Foreclosure Defense and Loan Modifications in every County in the State of Florida.