What is a Loan Modification?

Loan Modifications – Important Things You Must Be Aware Of

Let’s face it; times are tough for everyone these days. On the top of the list are homeowners struggling with their mortgage payments as well as other financial hardships. Most of the news heard lately about “mortgage relief” and “bailouts” does not appear to be helping homeowners facing default or foreclosure as we may have anticipated. The truth is, mortgage lenders don’t do loan modifications unless they are forced to, one way or another. To make matters worse loan modification companies offering stop foreclosure or loan modification services may be placing borrowers in worse situations by re-submitting all their financial information to the lender for a loan modification. In most cases these loan modifications are denied and now the lender has updated information that may even implicate the troubled homeowner in mortgage fraud. Many borrowers who bought or refinanced a home in the last three years used a Mortgage Broker who sold them an ARM or worse yet Option ARM loan while inflated home values and stated income allowed them to borrow more than the home was worth. Real estate agents, mortgage brokers, appraisers, loan officers, underwriters as well as bank executives made a killing in this market, and now we’re really feeling the effect. Most homeowners can’t refinance these days due to drastic property value declines, bank failures as well as financial hardships most are facing due to the “credit crunch” and our troubled economy.

So with all the lenders “smoke and mirrors” and bad news surrounding us what’s a troubled homeowner to do?

A loan modification seems to be the best option, as well as your only hope if you want to keep your home. Currently, one out of six homeowners nationwide is in default or foreclosure. Loan modification companies are coming out of nowhere boasting they are going to use TILA and RESPA violations to go after mortgage loan servicers and force them to modify your loan and reduce your principal balance. This just isn’t true. In matter of fact and loan modification company that is not a Law Office has absolutely NO leverage against your lender. Honestly, do you think a Loan Modification Company that offers you NO legal representation or a Loan Modification Attorney that offers a Loan Modification service is going to sue your lender? In addition, some attorneys out there would like you to believe a law suit is going to save your home. It may, but trust me; it’s going to cost a fortune. In some cases when a attorney can prove “predatory lending” or significant TILA or RESPA violations a simple phone call can get the job done. Borrowers need to be very careful these days in their approach with the lender. A lender does not have to modify your loan just because the property value dropped, that is not considered a hardship to them and they certainly don’t have to reduce the principal balance but they will in some cases. The Feldman Law Center is a Law Office that specializes in representing troubled homeowners imminent danger of losing their home, whether they are behind in their mortgage payments or not . Saving homes and offering sound legal advice is what we do, and we’re the best in the business. Troubled borrowers need proper representation with their lender, limiting our client’s exposure as well as fighting for the best possible loan modification is what we do best.

We are not here to milk our client’s for hefty retainers and leave them for dead, in matter of fact our fees are modest considering what you get with the Feldman Law Center. Our sophisticated approach drives proven results that save our clients homes. We have modified mortgages for lenders employees as well as many high level executives. We deal directly with the banks executives and not the minimum wage loss mitigation employees you will find on your own or with a loan modification company.

WARNING: Attorney based and assisted loan modification companies are NOT law offices and only offer “smoke and mirrors” as a means to get you to trust them. The Attorney Generals office as well as the Department of Real Estate simply cannot keep up with the loan modification companies operating illegally & unethically.

Important things you must be aware of:

1) Do not give any up front fees to loan modification or stop foreclosure companies boasting “attorney based”, “attorney backed” or “attorney assisted”!

2) Do not pay for a forensic loan audit unless it is performed by a Law Office, an attorney is the only person that may use lending violations as leverage!

3) Do not use a loan modification company unless they have an up front fee agreement approved by the DRE and offer a 100% money back guarantee!

4) Do not trust just anyone with your difficult situation; contact a Law Office and hire an attorney who specializes in Loan Modification and Loss Mitigation services!

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There are many companies using the words “attorney”, “legal”, “lawyer” and so on. The bottom line is, these loan modification companies are wrongfully using this language unless they properly disclose they are NOT a Law Firm. Also, not to mention giving you advice that could cost you to lose your home and put your family on the street. Struggling homeowners need real help during these difficult times and not some ex- loan officer trying to get a fat commission or give them advice. The Feldman Law Center offers troubled borrowers real solutions and legal representation with creditors at a very reasonable flat fee. We do not believe in milking our clients with monthly billing for legal services and offering false hope.  We offer straight talk, sound legal advice and the best possible results utilizing our expert negotiation skills and Federal Mortgage Laws. Call us today and see the difference for yourself. We will be more than happy answer any questions and share our knowledge as well as our proven results. We take great pride in our work and strive to be the #1 Law Firm in the country offering loan modification services.

Mr. Steven C. Feldman, ESQ. is available Monday – Friday during normal operating hours for in office appointments or a free consultation.

Call or Law Office at 800-527-8497 or apply on line at www.feldmanlawcenter.com Â

Loan Modification – What Is A Loan Modification?

A Loan Modification is a modification to the terms of an existing loan made by a lender in response to a borrower’s long-term inability to repay the loan. Loan modifications typically involve a reduction in the principal balance, interest rate or an extension of the terms. In some cases a different type of loan or any combination of the three. A lender might not be open to providing a loan modification to a borrower unless they are behind on their mortgage payments at least 4 months. By this time their credit is ruined and the lender or mortgage servicer can profit further by negotiating a forbearance agreement and collecting more fees.

A Loan Modification should be done by a Law Office and will stop foreclosure.

A Law office can use advanced legal techniques to achieve the most aggressive results for the client. An Attorney understands State and Federal laws as well as lending regulations. In some cases of RESPA or TILA violations an Attorney can threaten a recession of the loan or litigation, causing the lender to return ALL fees and interest paid through the loan. A Loan Modification company simply submits a package similar to a loan submission to have the lender review and decision. This DOES NOT achieve the best result for the borrower. In matter of fact it could make matters worse due to the fact one has exposed themselves to the lender without properly evaluating the entire situation. If the lender or broker has misrepresented the terms or worse yet committed bank fraud a Law Office can and should use the necessary means to bring the lender or broker to their knees to modify the loan and forgive some of the principal. In most cases a Real Estate Law Office can stop foreclosure with out bankruptcy simply by calling the lender or mortgage loan servicing company and getting a 30 day extension for a loan modification.

Why should you use a Real Estate Attorney and not an Attorney based or Attorney backed Loan Modification Company?

A Law Office that specializes in real estate law can negotiate a loan modification agreement  to stop foreclosure and get their client affordable mortgage payments. A loan modification with an attorney is different from forbearance and in most cases a forbearance agreement will require a borrower to bring in 100% of the arrearages. This is usually impossible for home owners already struggling with finances. A forbearance agreement provides short-term relief for borrowers who have temporary financial problems, while a loan modification agreement is a long-term solution for borrowers that normally will reduce the interest rate, change the terms of the mortgage and may reduce principal balance a combination of all three.

Example of a loan modification for an “option ARM” successfully completed from the Feldman Law Center in California.       

 

We have completed the modification on this borrower the following are the terms of the loan modification:

New UPB $842,442.17

Term 40/30

P&I $3,192.29             

Escrow $771.05               

PITI $3,963.34            

Due date 11/01/2008 (1st modified payment due in 2 months)        

Maturity date 04/01/2036       

Interest Rate 3.149% for the 1st two years, 4.149% for the 3rd year, and 5.149% on the 4th year and for the remainder term of the loan

Contribution $310.00

This client had a 7.50% interest rate and the loan recast to a $6,700.00 monthly payment. As you can see this is a drastic interest rate reduction with no negative amortization.

You may contact the FELDMAN LAW CENTER and request to see the clients’ actual document or listen to the recorded testimonial!

Loan modification is a term very unfamiliar to homeowners but not for very long. What most people are coming to realize is that losing their home to foreclosure is becoming a real possibility. Home foreclosure in America today is at an all time high and is affecting many homeowners that never believed they could lose their home to foreclosure. Homeowners are feeling the crunch of higher interest rates, fuel costs, and a slowing economy. A loan modification may be the only way for a homeowner to save their home. Negotiating with the bank for a modification of your home loan can be an overwhelming process for many homeowners. Major lenders such as Countrywide bank, Indy Mac bank, Wells Fargo, Bank of America, WAMU, New Century, Quicken Loans, Aurora, Aegis, EMC Mortgage, CITI Mortgage, Chase Bank, are overwhelmed with defaults and foreclosures. That is why retaining the services of an experienced law firm or real estate attorney rather than a loan modification company is of extreme importance. I have been around the mortgage industry for years and now find myself in the mix of the mortgage mess with an Option ARM loan that is due to explode in September.

The Mortgage Meltdown has hurt our entire economy as many families are facing foreclosure due to toxic mortgages and declining property values. California, Florida, Nevada, Arizona homeowners are the main sufferers as well as many of the Midwestern and east coast states. New mortgage laws to protect home owners are now in affect. If you want to find mortgage law information got to www.feldmanlawcenter.com or for foreclosure laws in your state you can simply Google your city and state foreclosure laws or find them on the Feldman Law Center web site. There is a wealth of information about loan modifications and other real estate services. In some cases the home owner may chose not o keep their home. In these instances an attorney can offer a deed in lieu of foreclosure and get a settlement offer from the lender.  The truth is these people can hire an Attorney to represent them with their lender and save their home and their hard earned credit. Lenders are facing record losses and may not be willing to help home owners unless they are forced to listen. A letter of representation from a licensed real estate attorney seems to get their attention fast. You can find Mr. Steven Feldman at http://feldmanlawcenter.com/home.html

 

Ten Queries on the Loan Modification Process

The loan modification process is nothing new and has been in existence for decades and yet most homeowners donâ??t know half the truth about loan modification. The lack of proper knowledge about loan modification makes the process very confusing and frustrating for homeowners who are already occupied with the thought of losing their homes to foreclosure. To get the most out of loan modification, one must obtain as much information as possible to fully exploit all legal possibilities and also to avoid being tricked by scammers who only want to steal away their hard earned money. With the various programs intended towards bringing the economy out of the vortex of financial collapse many programs have been implemented to make guidelines and information about loan modification more widely available. Succeeding are 10 commonly asked questions about the loan modification process along with their answers.

1. What precisely is loan modification?

A loan modification is a long term permanent change in one or more of the terms of a borrowerâ??s loan, thus the debt is restructured and results in payment terms the borrower is able to comply with.

2. Are late charges allowed to be included in the terms of the modified loan?

Per HUD, the accrued late charges should be waived by the lender and excluded from the would be modified loan agreement â?? such varies depending on the type of loan but it is advised that a borrower should request from his lender a complete breakdown and description of all the fees and penalties during the negotiations for loan modification.

3. How will the new government programs help me get a loan modification?

The Federal government has allocated $75 billion dollars to subsidize lenders and servicers who grant loan modification agreements to their borrowers who are at the brink of default or having their homes taken to foreclosure sales. This greatly encourages banks to engage in loan modification as they will now have a monetary incentive to tender help to qualified borrowers. In addition, homeowners who pay their new modified payments on time will be eligible to up to $5000 discount to their loan balance.

4. How do I know if I will qualify for a loan modification?

The most important criterion your lender will be looking for is your ability to make your payments based on the new terms after the loan is modified. To prove that you will be able to afford making the new payments you are required to show proof to your lender of your current financial capacity through receipts, financial statements, and other documents or records that may support your credit score.

5. Is current delinquency of payments needed to get loan modification?

It is greatly advised that borrowers contact their banks with the earliest signs of future financial difficulty, even if they are not yet delinquent on their payments. Most lenders today are entertaining applications from borrowers who are not currently delinquent but have proof that because of impending interest hikes will no longer be able to sustain making payments under the current loan terms.

6. What are acceptable situations for a borrower to be considered in hardship?

Each borrower may have his unique set of circumstances that brought about their delinquency in making their loan payments, but the reasons most banks accept in granting loan modification are divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service, and others. A convincing hardship claim in your loan modification application is a very effective tool in pushing the success of your loan modification request.

7. Will a loan modification help stop foreclosure?

Preventing foreclosure is one of the primary goals of the loan modification process. The loan becomes current so foreclosure is brought to a stop. Just keep in mind though, that even after loan modification is completed, the saving on oneâ??s home still lies primarily on the homeownerâ??s hands.

8. Can missed payments be added back into the new loan modification?

Arrears can be added back to the new loan balance at the option of the lender but will be spread over the new life of the loan in order for the new loan to become current.

9. Can a homeowner do represent himself on loan modification negotiations or should specialists be hired as representatives?

This is at the full discretion of the homeowner. Good loan modification specialists have the experience and skills to negotiate the best loan modification but will surely charge a fee for their services. Assess the cost-benefit results of hiring a company and decide. Just donâ??t forget that regardless of which you choose you should take the time to know all you can about the process of loan modification.

10. How should one start in getting his loan modified?

Know the loan modification process, your legal rights, and all available legal remedies prior to sending your application to your lenderâ??s loss mitigation department.

Get help for your loan modification 24VIPINC and from CallComLeads for your loss mitigation leads.