Applying for Mortgage Relief
How you apply for mortgage relief can be one of the most important decisions you will make for your family, and getting the best results possible can have a huge impact on your family’s future. Simply put, your options boil down to hiring a foreclosure attorney to represent you, or attempting the process yourself.
Mortgage mitigation is complicated and difficult, and lenders would like nothing better than for you to attempt the process yourself. Lenders are reluctant to restructure your mortgage, and they will make it difficult for you, especially if you are not represented by a foreclosure attorney. However, with a strong presentation from an experienced foreclosure attorney, it’s possible to get what you are looking for and be spared the grief and aggravation of trying to resolve the matter by yourself.
This guide explains how to get the best loan modification agreement possible.
How it works
Foreclosure Attorney Consultation:
The process starts with your initial consultation with your foreclosure attorney. During this consultation, your foreclosure lawyer will review your situation and determine your options. Your foreclosure lawyer will then brief you on the required documentation and the strategies that will be deployed to obtain the resolution you want.
Once your foreclosure 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:
Proof of income
Your foreclosure attorney will determine the best approach after conducting a thorough analysis to expose any legal violations committed by your lender or servicer, including Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) violations.
Your foreclosure lawyer will begin negotiations shortly after sending your application. This is where the real work happens, as your foreclosure 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 attorney is crucial to obtaining the best result possible.
When your bank and foreclosure attorney have reached an agreement, they will send you a document detailing the offer for final approval.
Each bank has its own qualification guidelines. To get the best results, it’s important to know their guidelines, and most experienced foreclosure lawyers will. The factors that are most commonly considered include:
Income vs. Expenses:
The 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 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 attorney can help you formulate your hardship letter.
Lenders 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!
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.
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.
Finally, your foreclosure 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 attorney will understand your case and negotiate until you reach a lasting solution.