Foreclosure is a term that’s plagued with financial and social stigma and it brings to mind [..]
How Can a Mortgage or Loan Be Modified?
Experienced Bankruptcy Attorneys Help Clients Facing Debt in New Jersey
When you are looking for an alternative to bankruptcy, or if bankruptcy protection does not go far enough, consider a loan modification. The loan modification process under the government’s new foreclosure prevention plan is voluntary to the mortgage company. However, there are times when a loan modification is the right step for both borrowers and lenders.
The loan modification lawyers at Brenner Spiller & Archer, LLP negotiate with lenders to obtain loan modifications for clients throughout Central and South Jersey.
Who Is Eligible for a Loan Modification?
The loan modification process was created to stop foreclosures and allow people to process a request to alter the terms of their mortgage. Applications may be made for both first and second mortgages. Under certain circumstances, individuals must be behind in their mortgage in order to be eligible for a loan modification. Yet, you may also be able to modify your loan if your mortgage or interest rate is higher than the market rate and it is not necessary to be behind in your payments.
Certain factors, such as your income and delinquency on your mortgage, can play a factor in determining whether you are eligible for loan modification. Our bankruptcy attorneys can help you establish whether loan modification is an option for you.
Why Do You Need an Attorney for a Loan Modification?
Successful loan modification also depends on your mortgage company’s voluntary participation in the federal government’s loan modification program. Working with the mortgage company is difficult because it is rarely looking out for your best interests. Usually, people wishing to modify their mortgage will get shuffled around from person to person when they try to talk with their mortgage company or bank. The process is frustrating and labor-intensive.
An attorney can take the burden off of your shoulders. Our bankruptcy lawyers are skilled and aggressive negotiators who have experience negotiating with creditors. While mortgage companies are unpredictable, and we cannot promise that we will get you a loan modification, having an experienced attorney on your side can increase your chances.
What Are the Options for Modifying Your Mortgage or Loan?
The mortgage company may choose to modify your loan in a few different ways. Usually, it will lower your payment by:
- Lowering your interest rate
- Extending the term of the mortgage/loan (loan extension)
- Placing your arrears at the end of the loan
- Reducing the balance due on the mortgage (this is rare)
Lenders may also put your arrears on the back of a loan, allowing you to pay your arrears once the rest of your payments are met. This may be a better solution for you than Chapter 13 bankruptcy because it does not require you to pay extra money each month to “cure” (pay back) your arrears.
Loan Modification Mediation
Anyone who is behind on a mortgage and is in foreclosure has the right to request mediation to allow them to deal directly with their mortgage company. Mediation brings your loan modification request to the table. Loan modification mediation is permitted under certain government programs, including the Homeowner’s Affordable Modification Program (HAMP).
You are allowed to have a lawyer represent you during the mediation. While the court may appoint a lawyer for you, it may be beneficial for you to hire your own attorney. A private attorney can spend more time on your case and give it the attention it deserves.
Contact Our New Jersey Mortgage Modification Lawyers
There may be options available that can help stop foreclosure and allow you to keep your home. Contact our loan modification attorneys online or call 856-963-5000 to schedule a free initial consultation to discuss your situation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.