These days, loan modification has become the solution of choice for homeowners trying to stop foreclosures and keep their homes. Unfortunately, the process of applying for a loan modification is difficult and time consuming. The most crucial decision a homeowner has to make is whether to hire a foreclosure defense attorney to represent them, or attempt the loan modification process themselves. For reasons consistently supported in this website, MRP strongly recommends experienced attorney representation for all mortgage related legal matters.
This is your home we are talking about, so don’t take chances! Making the right decisions regarding mortgage loan negotiations can mean the difference between losing your home to foreclosure and keeping it with affordable payments. Do your research, and hire an experienced foreclosure defense attorney! An experienced foreclosure defense attorney is in the best position to defend your rights, and get you the best results.
QUESTION #1: Can’t you just do it yourself?
ANSWER: Technically, you can, but it takes a lot more work than you think and the results probably won’t be the same. In short, it is not recommended. Many foreclosure defense attorneys promoted by MRP report that a high number of clients first attempted the process themselves. Banks are aggressively defending their assets and have developed tactics which are designed to frustrate and wear down homeowners. It can be months of sending documents and information without any answers. Many homeowners are led to believe they are receiving a loan modification, only to be summoned to court or given a notice of sale, in a process known as “dual-tracking”. Alternatively, a loan modification attorney communicates directly with your lender’s decision makers, using legal strategies to get the best results. An experienced foreclosure defense attorney understands both the government and lender proprietary program guidelines, and what it takes to qualify for assistance.
QUESTION #2: Wouldn’t my lender rather foreclose than give me a loan modification?
ANSWER: In some cases, foreclosure is the more efficient option. However, lenders lose money with every foreclosure and can be required to increase their reserves. The banks already have the liabilities of owning too many foreclosed properties and having too many non-performing loans on their books. In many cases, lenders would much rather modify your mortgage loan to something affordable and convert your loan into a performing asset, or otherwise resolve your troubled mortgage to reduce their losses. Your foreclosure defense attorney must convince your lender of this choice
QUESTION #3: Can a loan modification stop the foreclosure process?
ANSWER: It is true that your chances diminish the longer you wait, as banks invest money in the foreclosure process and are reluctant to stop it without good cause. However, until your home is actually sold at auction, no one can force you to leave your home. A loan modification can stop the foreclosure process as close to a few days before the sale date. According to the department of Justice Settlement, lenders are required to stop the foreclosure process upon receipt of a complete RMA, and not resume the process until a formal decision is rendered. This buys you enough time to get back on your feet while your foreclosure defense attorney works out a lasting solution with your lender.
QUESTION #4:Is it an instant solution to mortgage problems?
ANSWER: Loan modifications really work, but they take time and the right expertise. Depending on how far behind you are, the process typically takes anywhere from two to four months. However, since the loan modification process stops the foreclosure process, you won’t have to worry about losing your home while the modification is being negotiated. If you submit your paperwork on time and cooperate with your foreclosure defense attorney, you can speed up the process, avoid complications, and save money. A good foreclosure defense attorney also has tools to create legal leverage throughout the process, and defend a client’s interests.
QUESTION #5: Do you need good credit to qualify?
ANSWER:No. Standard requirements vary from lender to lender, but the bottom line is that the loan modification should make financial sense to your bank. The most important factor is verifiable income that demonstrates your ability to maintain the payments going forward. Your credit rating is not considered. Your lender will want proof that falling behind was a temporary snag, and that you can afford to stay on track if they modify your loan. This means you have to have a verifiable source of income and a valid case of hardship.
QUESTION #6: Are loan modification companies scams? I heard they take your money, but don’t do anything.
ANSWER: In any business there are always unscrupulous people, but you can find legitimate foreclosure defense attorneys that will help you. Strong legislative measures on the state and federal level, as well as thorough regulatory actions by attorneys general and the FTC have really added legitimacy to the practice. The important idea in foreclosure defense is to work only with an experienced foreclosure attorney. You should thoroughly investigate the background of anyone who claims to be able to do a “loan modification” before you pay for services. The Federal Trade Commission (FTC) strictly prohibits any non-attorney organization from representing distressed homeowners.