How you apply for mortgage relief is an important decision, and getting the best results possible can greatly impact your family’s future. Simply put, your options are hiring a foreclosure defense attorney, or attempting the process yourself.

Lenders are reluctant to restructure your mortgage, and notorious for taking advantage of homeowners not represented by a foreclosure defense attorney. Mortgage mitigation is complicated and difficult, but with a strong presentation from an experienced attorney, it’s possible to get what you want, without the grief of trying it yourself.

For reasons consistently supported in this website, MRP strongly advocates foreclosure defense attorney representation for distressed homeowners.

How it Works:

Foreclosure Attorney Consultation:

The process starts with your initial consultation with your foreclosure defense attorney. During this consultation, the attorney will review your documentation and other relevant facts, and determine your options. Your foreclosure defense attorney will then brief you on the required documentation and the strategies that will be deployed to obtain the resolution you seek.

Paperwork:

Loan Modification PaperworkOnce your foreclosure defense attorney determines that you have a viable case and you choose to retain the law firm, your will receive a package asking for financial documents that will be used for your application. These documents usually include:

Loan Modification Hardship LetterProof of Income:

  • At least four months of bank statements
  • A hardship letter explaining your situation and requesting a loan modification.
  • An expense sheet detailing all of your monthly expenses, including items you are not paying for.
  • Your most recent mortgage statement.
  • 2 years W2 forms.
  • 2 years tax returns.
  • Your foreclosure defense attorney will determine the best approach after conducting a thorough analysis of the documentation you provide, and any potential legal violations committed by your lender or servicer.

    Negotiations:

    Mortgage Mitigation AttorneysYour foreclosure defense attorney will begin negotiations shortly after sending your application. This is where the real work happens, as your foreclosure defense attorney will negotiate with your lender to get your loan modified. A good loan modification attorney will negotiate aggressively until the bank makes an offer that suits your financial capacity. This negotiation will determine the details of your modification and is the biggest reason why having a foreclosure defense attorney is crucial to obtaining the best result possible.

    Approval:

    When your bank and foreclosure defense attorney have reached an agreement, they will send you a document detailing the offer for final approval.

    How to Qualify:

    Each bank has its own qualification guidelines. To get the best results, it’s important to know their guidelines, and most experienced foreclosure defense attorneys will. The factors that are most commonly considered include:

    Income vs. Expenses:

    Loan Modification Income and ExpensesThe main reason you need to show income vs. expenses is to prove to your lender that you can afford to make your monthly payments once they are lowered via loan modification. This comparison shows how much of your monthly salary goes into paying off your mortgage, including the principal and interest, property taxes, and insurance. A foreclosure defense attorney can make sure you are properly portraying this comparison.

    Nature of hardship:

    The HAMP and all lender proprietary programs have specific rules on what qualifies as financial hardship. Your hardship letter should explain in detail what made you fall behind and show that it was out of your hands. Commonly accepted situations include illness or death in the family, job loss or income reduction, lawsuits, divorces, and military service. Your foreclosure defense attorney can help you formulate your hardship letter.

    Making Home Affordable (MHA) defined list of qualifying hardships.

    Payment History:

    Your payment history is considered for loan modificationLenders will also review your previous mortgage statements to see how you handled your payments before you fell behind. If you made timely payments prior to financial hardship, it shows that you can get back on track once you have a mortgage modification. It is important to distinguish that this is not the same as your credit history. Your credit rating has nothing to do with qualifying for a loan modification!

    Bank statements:

    A good bank account shows two things. First, it shows that your spending habits were stable before you fell into hardship. It also provides further verification of your income and expenses, and that you have an emergency fund in case you fall behind again.

    Tax payments:

    This serves as secondary proof of your financial responsibility. Consistent returns show your financial responsibility and that you are not just trying to shrug your financial responsibilities. It also provides support to whatever claims you made in your hardship letter, and proves that the situation was out of your hands.

    Foreclosure Defense Attorney:

    Foreclosure Defense AttorneysFinally, your foreclosure defense attorney plays a big part in your application. You want someone who comes from a respectable firm, has a good track record (preferably in foreclosure prevention and loan modification), and has established contacts with all major lenders. A good foreclosure defense attorney will understand your case and negotiate until you reach a lasting solution.

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