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Loan Modification Attorney Can Protect Your Interests
A home is a person’s most valuable asset. It only makes sense that you would want to protect your asset. If you are falling behind in your mortgage payments or facing foreclosure, a loan modification... Read Article ›Trial vs. Permanent Loan Modification
Most of my clients don't understand the difference between a trial loan modification and a permanent loan modification. I'm writing this article to help homeowners better understand and navigate thei... Read Article ›Home Affordable Mortgage Program Effect on Your Credit Score
Borrowers who are opting for a mortgage modification pursuant to The Home Affordable Modification Program (HAMP) must go through a three month trial period before the lender will approve the modificat... Read Article ›Frequently Asked Questions
- What is a loan modification?
- Loan modifications are changes to your loan that might reduce your monthly payment and enable you to keep your home. Modifications such as reduced interest rate or an extended maturity or both will reduce your monthly payment but leave you with the same principal balance. Reductions of the principal balance itself may be necessary or advisable if your property has dropped in value. You should discuss with your attorney your circumstance to determine the loan modification best suited for you. Foreclosure and negotiations for a loan modification are two separate processes. Do not mistake one for the other. If your home is in foreclosure, negotiations for a loan modification will NOT by itself stop or slow the foreclosure process. To stop or slow the foreclosure process during negotiations, your attorney should obtain a written agreement from your lender or your lender's attorney to that effect. Without a written agreement, you or your attorney must continue to respond to the foreclosure suit in order to protect your interests during any negotiations.. You or your attorney may start negotiations with your lender for a loan modification at any time, before or after foreclosure proceedings have commenced. If foreclosure has not yet been filed, you may elect to use a mortgage broker or credit counselor to assist you in negotiations. Once foreclosure is filed, regardless of negotiations, you must protect yourself, a mortgage broker or credit counselor can continue negotiations but only an attorney can represent and protect your interests in court.
- Where can I turn for help?
- If your home is in foreclosure, DO NOT DELAY! Talk with an attorney as soon as possible. You will be at a distinct disadvantage, until you have your own attorney that knows the process and can protect your interests. If your home is not yet in foreclosure, talk with your lender directly about a lower payment, or a modification. Talk with an attorney, mortgage broker or credit counselor to better understand your options. An attorney will be able to advise and represent you in both loan negotiations and foreclosure matters, if or when a foreclosure is filed. Remember, negotiations for a loan modification will not stop or suspend any foreclosure suit. If or when you are served, talk with an attorney as soon as possible.
- What are the steps I can expect in foreclosure?
- The foreclosure process will follow a normal litigation process unless you fail to respond to the complaint. The normal process will allow you to stay in your home while your attorney argues your issues and tries to negotiate a loan modification. If you fail to respond to the complaint, your lender may seek an accelerated “Default Judgment” and sale. You may shorten the time and the opportunity to re-negotiate your loan and the sale of your home may take place as soon as 3-4 months. Below are brief descriptions of the steps in each of these processes. 1. Late payments – Talk with your lender beforehand to find out what they might offer. Talk with an attorney as early as possible. Once the complaint is served upon you, you only have 20 days to respond. 2. Complaint – Once you are served, you must file a motion or an answer with the court within 20 days. A letter is not sufficient. DO NOT DELAY! If you do not file timely, you may lose your home sooner than you hope. 3. Default and Sale – If you do not file timely, lender will move for an early default and sale and may also obtain a deficiency judgment. You may be evicted anytime after sale without any further notice. Borrowers that fail to respond timely will lose the opportunity to remain in their home while they attempt to modify their loan or reach a settlement. ACT PROMPLTY and you may remain in your home while your attorney defends your case. 4. Motions, answers, defenses, claims and discovery – Your attorney will determine what, if any, strategy, motions, answers, defenses, claims and discovery may be appropriate for you. These actions and their results, time and expense may prompt more meaningful loan modification or settlement discussions with your lender. 5. Hearing or trial – Your lender will seek a summary judgment or trial quickly. Your attorney will again determine the basis and the arguments for your responses. If summary judgment can be avoided, then the matter will be set for trial. The time and expense of appeal may again prompt more meaningful loan modification or settlement discussions with your lender. 6. Judgment – After the hearing or trial, the judge will render his decision or judgment. You will have 30 days in which to appeal any decision. A bond may be required to stop any sale. If an appeal is appropriate, the time and expense of appeal may again prompt more meaningful loan modification or settlement discussions with your lender. 7. Sale – If no appeal is filed, a court ordered sale date will be set, as early as 20-35 days after judgment. You may be evicted anytime after sales without any further notice. 8. Deficiency – Your lender may seek a deficiency judgment against you if your home eventually sells for less than what you owe, including interest, attorney fees and costs. If so, you may have to consider bankruptcy or other options.
- I have just been served, what should I do?
- If you have been served, DO NOT DELAY! You and your attorney only have 20 days to file with the court a motion or an answer. A letter of conversations with your lender or the lender's attorney in NOT sufficient. Loan modification discussions by credit counselors, mortgage brokers or others, anyone other than an attorney are NOT sufficient. Gather the following information and talk with an attorney as soon as possible. a) What are the circumstances that led to my foreclosure?...loss of job, interest rate hike, spike in monthly payment, decline in property value, other? b) What are my current payments for principal, interest, taxes, insurance and association fees and what can I afford if I want to try and modify my loan and keep my home? c) Do I want or need an adjustment in interest rate or a reduction in principal or both to stay in my home? d) What is the current value of my home compared to the mortgage balance and what is the current market rent for similar home in my community? DO NOT DELAY! Talk with an attorney as soon as possible.
- When will I have to move out of my house?
- Before a judgment and sale date can be obtained, your attorney will represent your interests, discovery, motions, hearings, etc. that may take several months. Your attorney should keep you advised on a monthly basis as to motions, hearings, discovery etc. so that you can have ample time and advice on the critical decisions and time frames that will establish the sale date and your eventual move date. Once the lender has obtained a judgment and order for sale, the lender will advertise the sale date for your property. If no appeal is filed, a court ordered sale date will be set, usually 30-45 days after judgment. You may be evicted anytime after sale without any further notice.