Since HAMP (Home Affordable Modification Program) expired in 2016, many homeowners have been wondering if loan modification help is still available in 2017. As a matter of fact, loan modification is still the most popular way to prevent foreclosure. That being said, new trends have emerged in 2017 that homeowners should be aware of. This guide offers insights into successfully navigating the loan modification process in 2017!
1 - Don’t wait! Get help at the first sign of trouble.
In 2017, we have witnessed some of the fastest foreclosure times in many years. Some of the reasons for this acceleration include the expiration of HAMP, a new Justice Department, and a new Administration. What you need to know is simply that lenders have been emboldened by the new foreclosure landscape. As a result, we are now seeing homeowners in foreclosure after only a couple months of delinquency. Long gone are the days of lenders waiting for years before they foreclose. If you are struggling with your mortgage, taking action at the first sign of trouble increases your chances of success. Even if you think you can no longer afford your home, you can prevent damage to your future by making wise choices to prevent foreclosure.
2 - Hire a foreclosure defense or loss mitigation attorney!
Look, I understand the temptations to try the loan modification process yourself. You have probably already thought, “if I can’t pay my mortgage, how can I afford an attorney?”. Plus, your lender probably told you that you don’t need an attorney, and they have programs designed to help you, right? Well, let’s talk about why that reasoning fails, and why it is crucial to hire an attorney for loan modification help.
First and foremost, lenders are notorious for taking advantage of homeowners who try to represent themselves. Secondly, a loan modification negotiation is complex and difficult, even for an experienced foreclosure defense attorney. Not understanding program guidelines and the “rules” of loan modification can result in the denial of your application. A successful loan modification presentation needs to make it easy for the lender to approve. When it comes to something as important as your home, hiring seasoned legal professionals can make all the difference. If you are already in default, it is likely that your lender has already stopped accepting your payments. At this point, they do not have to accept your payments and can demand the full balance due or foreclose. That puts you at a crossroads when you should consider using your available funds to hire an attorney.
3 - Know what you want, and set realistic goals.
It is important to set realistic goals before you enter the loan modification process. You cannot control many of the factors your lender will consider towards your loan modification request. However, you can set realistic goals for an ideal outcome. If you had a legitimate hardship that caused you to fall behind, but can afford your payments going forward, home retention is a realistic goal. If you can simply no longer afford your home, it is unlikely that you will be offered any loan modification help. Fortunately, your lender may offer foreclosure alternatives and a graceful exit strategy. A good example would be completing a deed-in-lieu, having any deficiency balance waived, and transition assistance money. In many cases, you may be borderline on affordability, and the outcome could go either way. That’s where hiring the right foreclosure defense or loss mitigation attorney is crucial to getting the best possible outcome.
4 - Assemble and maintain good records of all correspondence.
You should assemble and maintain good records of all correspondence and communication with your lender. These records can assist your attorney with making your case, and holding your lender accountable. Lenders consistently “lose” documents and make “mistakes”. If you have the records to prove your claims, they will have little defense for not honoring their commitments. Also, if your loan modification request should turn into litigation, you will already have a file built. So, if you have not already starting assembling all of your documentation, you should begin doing so right away.
5 - Show your lender that you can afford your mortgage.
The bottom line to a loan modification request is showing that you can afford the monthly payment going forward. If your request doesn’t make financial sense to your lender, it will be denied. In other words, you have to show that keeping you in your home would be more profitable than foreclosure. If you fell behind because of lost income or extraordinary expenses, it is important to show that the hardship is behind you. If you are still experiencing a lack of income, you should do everything you can to replace it before applying for assistance. As long as your income shows that you make about 3 times your mortgage payment, you have a chance.
6 - Have a backup plan.
No matter how good your chances of success are, you should always have a backup plan. In loan modification, there are no guarantees, and the decision ultimately rests with your lender. Remember, the investor that owns your note may have objectives that you are not aware of. If your loan modification is denied, you can look at foreclosure alternatives like deed-in-lieu. This is yet another reason why having a foreclosure defense attorney is so important. They can negotiate on your behalf through the entire process, so don’t try it yourself. Not only will an attorney maximize your chances of success, he or she can also minimize the damage to your future regardless.
To conclude, foreclosure defense and loss mitigation through the loan modification help process is still alive and well. After roughly a decade, it remains the most cost effective legal representation available for foreclosure prevention. Despite the expiration of HAMP, there are still many programs available to homeowners today. If you only take one thing from this article, it should be that hiring an attorney is crucial to success in the loan modification process. These days, you can find reputable attorneys with significant experience, at a very reasonable cost. Having seen many approaches to foreclosure prevention in the past decade, we believe attorney representation is worth every penny, regardless of outcome.