When a homeowner is facing foreclosure, getting a loan modification can be an attractive alternative to filing for bankruptcy or facing the foreclosure process. If you are considering modifying your mortgage loan, understand that it is not a simple process. You will need to demonstrate that you are qualified to have your loan altered this way and if you do receive a modification, you will need to comply with its terms. Before agreeing to any modification to your current mortgage, speak with an experienced loan modification lawyer about your options, your rights, and potential risks associated with this action.
Are You Underwater or at Risk of Default?
Typically, you need to show that you are either underwater on your mortgage, which means you have a mortgage balance higher than the home’s actual market value, or that you are at risk of defaulting on the mortgage in order to qualify for a loan modification. You can do either of these by submitting the related paperwork to your loan servicer, which can be a copy of your mortgage statement, pay stubs, and documentation showing your current financial hardship.
Be sure to submit information that is factually correct, up to date, and tells the whole story of your financial difficulty. Outdated paperwork can lead to your whole case being dismissed and an attempt to paint a picture that obscures the truth can be deemed to be an act of mortgage fraud, for which you can face criminal charges.
Most loan providers are happy to work with homeowners in need because this reduces their risk of losing money to defaulted loans. The foreclosure process is expensive and time-consuming for all parties involved, the lender and the homeowner, so it is in all parties’ best interest to avoid foreclosure.
HAMP is No Longer an Option
The Home Affordable Modification Program (HAMP) was a federal program that aided homeowners hit by the subprime mortgage crisis. Although it is no longer possible to submit an application to the program, it is possible to receive help from other government programs, such as the Home Affordable Foreclosure Alternatives program offered by the United States Department of Housing and Urban Development (HUD).
Do Your Research and be Willing to Ask Questions
When you are trying to modify your home loan, you need to be willing to be a student of the process. Do your own research and take notes to help yourself understand the process and ask the right questions when you speak with loan modification professionals.
Work with an Experienced Palatine Bankruptcy Attorney
One of the most important ways to protect your finances and your rights while you are working through a mortgage modification is to work with experienced legal counsel. To discuss your case in greater detail with an experienced bankruptcy attorney, contact our team at Newland & Newland, LLP today to schedule your initial consultation in our office. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.
(image courtesy of Gus Ruballo)