When people are facing foreclosure, they do not always realize that they have options. One of these is a loan modification through the lender. A loan modification can change the principal of the loan, the interest rate, and other terms to make the loan more affordable. However, a lender must agree to the loan modification, which means borrowers must negotiate with them. This is not always easy, but there are some tips you can follow to give yourself the best chance of obtaining a loan modification to prevent foreclosure and the costly deficiency judgments that often come with them.
Do Not Ignore Your Lender
When facing foreclosure, your lender will likely contact you regularly. While you may be tempted to avoid phone calls and ignore letters and notices, this is not going to stop the foreclosure process. In fact, it will likely only make your lender angry, which will only make it more difficult to come to an agreement with them.
Always respond to your lender when they try to contact you. When you do, they may agree to a forbearance, which is a temporary payment suspension. This may mean that you do not even have to obtain a loan modification. This solution usually only works for short-term problems, such as if you faced a period of unemployment but now have a job that will allow you to pay your mortgage.
Stay in the Home
In order to obtain a loan modification, the home must be your primary residence. If you leave it, the lender may claim that you abandoned the property and continue foreclosure proceedings. Although you may be tempted to simply walk away from the home, and the problems associated with it, doing so will likely be detrimental to your case.
Simply telling your lender that you can no longer afford your mortgage payments is not enough. They will need you to present evidence proving that the statement is true. You can write a hardship letter detailing the scenario that caused you to experience financial difficulties. You should include in your letter any dates that you made mortgage payments, and any efforts that you made to pay, such as partial payments. You should also provide evidence that shows that you are now able to make payments. Pay stubs can help prove this.
Contact a Foreclosure Defense Attorney
Facing lenders on your own is often difficult. To add to this, many people do not know how to negotiate effectively and are not aware of everything they may need to include with their application. An attorney can ensure that you fill out the application completely and properly. A lawyer will also help you gather the pay stubs, bank statements, W-2 forms, and tax returns. An attorney can also help you write your hardship letter so it is effective and will encourage the lender to agree to a loan modification.
An attorney will also be very useful in case the lender does not approve your loan modification. In this case, they may continue with foreclosure proceedings, but there are several defenses available. An attorney will understand what these are and use them effectively to help you stay in your home. It is best if an attorney has been there from the very beginning of your case so they are fully informed of all the facts.
Contact Your Lender
Of course, to obtain a loan modification, you will need to speak to your lender. Be prepared to answer questions that pertain to your income and monthly debt. This means you must gather this information and have it all on hand when you contact the lender. This conversation will not determine whether or not you receive a loan modification. It will simply tell the lender if you qualify for one. If you do, they may give you an information packet that will also contain an application for the modification.
Once you have applied for a loan modification, you must remain patient. It is certainly a very anxious time and it may be difficult to get the proceedings off your mind. However, depending on your lender, it could take anywhere from a few weeks to a few months to receive an answer. Contacting your lender every day will not help speed your case up, and will likely only annoy your lender.
If your loan modification is approved, the lender will send you a proposed agreement. Make sure your attorney reads over all the terms and conditions very carefully. This agreement may be full of legal jargon, but it is also important that your lender fully explains what the agreement says. Your attorney can also advise on whether the proposed agreement is fair and if you will be able to fulfill the terms, such as the payments you will have to start making.
If your attorney decides that the proposed agreement is not fair, or you do not think you can make the payments, you and your attorney can enter into negotiations with the lender. During meetings with your lender, you can negotiate the interest rate, the term of the loan, late fees, and any good faith payment you are prepared to make. Remember that you may not be able to negotiate the principal or any amount that you still owe from before you applied for the loan modification.
Let Our Florida Foreclosure Defense Lawyers Help With Your Loan Modification
A loan modification can be a great solution that helps you prevent foreclosure and obtain a loan that you can actually afford. However, loan modifications are not always easy to obtain. They require several meetings with your lender, tough negotiations, and the entire process is very stressful. At Loan Lawyers, our Fort Lauderdale foreclosure defense attorneys can help.
We have negotiated hundreds of loan modifications for our clients, and know the other defenses that can be used to keep you in your home. We will walk you through the entire process of negotiating a loan modification and give you the best chance of success with your case. You do not have to go through this alone. Call us today at (954) 523-HELP (4357) to schedule a free consultation with one of our attorneys.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.