If you struggle to make your mortgage payments and are worried about foreclosure, you may be trying to find solutions. To avoid foreclosure and address mortgage payments, you may want to ask for a loan modification. With a loan modification, you keep the same agreement, but you change the terms to make your mortgage payments affordable. If you are interested in a loan modification, you can consult Queens loan modification lawyer Shane D. Scott. There are companies that claim to assist with loan modification, but it is wiser to work with a reputable attorney to avoid foreclosure. Many of those companies try to collect a fee up-front for loan modification services, but this is illegal under state law.Loan Modifications
Many people try to avoid foreclosure by asking for a loan modification. If the lender and you agree to change your loan terms to make your payments affordable, this is a loan modification. Modifications are addendums to the original loan, rather than a new loan; in contrast, if you refinance, you would not keep your original loan but would instead sign a new loan agreement with more favorable terms. For many people, however, it is not possible to refinance because they owe more on their loan than what their home ended up being worth.
Often, it is cheaper for a lender to modify a loan than to proceed with a foreclosure. There are certain types of loans for which lenders receive governmental incentives when they agree to modify a loan. A loan modification attorney in Queens can advise you on whether your loan qualifies. To decide whether it is willing to modify your loan, the lender will examine your income, expenses, debt-to-income ratio, and possibly the equity in your home. It will examine whether the modification would actually make the loan affordable for you.
To be considered affordable, your housing expense after a modification should fall between 25 and 45 percent of your pre-tax income. The changes that may be made to get the modification to be affordable within this range include extending the loan term up to 40 years, converting an adjustable interest rate to a fixed interest rate, lowering the interest rate, waiving past fees, or forgiving part of the loan balance.
The benefit of a successful loan modification is that it removes the threat of foreclosure as long as you abide by the terms of the modified loan.Eligibility for Loan Modification
You must meet certain requirements to be eligible for a loan modification. Most lenders or loan servicers require that you have experienced a documented change in your financial circumstances, that you occupy and own the property that is the subject of the loan as your primary residence, and that you are at least 90 days delinquent on mortgage payments. Additionally, your Queens loan modification attorney can help you show the lender or loan servicer that you have enough income to afford a reasonable mortgage payment once the loan is modified. You will need to present documentation to establish your eligibility; these documents include your bank statement, pay stubs, and tax returns.
A lender has 30 days to answer your request to modify a mortgage, starting from the date when you send the documents. As part of the loan modification process, you are entitled to information about your mortgage, including which bank or company owns the mortgage and the contact information for the person handling your request for the loan modification.Retain a Queens Attorney to Prevent a Foreclosure
Often, it is in a bank’s financial interests to grant a loan modification, rather than incurring the expense of foreclosing, but this does not guarantee that you will be given a loan modification. If you are not eligible or cannot reach an agreement with your bank or other lender, you may want to consider a short sale or a deed in lieu of foreclosure. You should consult an experienced loan modification lawyer in Queens about the options that may apply to your situation. You can contact Shane D. Scott at (800) 230-0744 or through our online form.