How Mortgage Modifications Can Stop Foreclosure

First Time Foreclosures In Queens Up In Q3 2019

November 5, 2019

Published by Dan Rose at November 6, 2019

Mortgage Modification

With decades of experience, foreclosure lawyers have developed working relationships with most bankers in the region and the country. These lawyers have professionals on their staff who will help you negotiate new terms for your mortgage, which will help you prevent foreclosure, keep your home and gain financial flexibility. Negotiating a mortgage modification is very difficult for homeowners and businesses who do not know the law; that’s why it’s so important to have a lawyer at your side.

The foreclosed properties often remain on the market for many years and eventually sell at a considerable loss to the bank. For this reason, many lenders prefer to let you keep your commercial or commercial property so that you can continue to receive payments. However, loan modifications are not guaranteed for anyone, so you should not risk trying to negotiate an agreement yourself.

Lawyers with in-depth knowledge of the latest federal and state laws and regulations can claim rights that you may not even know. This prevents banks from taking advantage of you during the difficult times of your life and encourages them to be as forgiving as possible with their new conditions.

In the simplest terms, a loan modification can prevent foreclosure since you enter into a new binding contract/agreement with the lender. This new agreement is designed to allow the owner to make a payment or payments lower than the initial mortgage allowed.

Once the loan modification documents are completed, the bank/lender has reached an agreement and understands that the landlord will pay less than the previous mortgage, while the lender modifies the loan and agrees not to enter into the foreclosure procedure.

How to Apply For a Mortgage Modification

Most banks/lenders have a department that manages the procedures for closing the assets they own. This department is where you need to be when you need to contact available personnel to submit your loan modification application.

Your request should be a clearly explained letter explaining the real reasons for the financial difficulties you are facing, as well as the reasons why they prevent you from meeting your current mortgage obligations. Be sure to include current income levels and a detailed list of monthly expenses.

Explain in your letter that the reduction of principal/interest rate and a new reduced payment would allow you to catch up on any late payment. Describe how you plan to change your current economic situation to fulfill any mortgage obligations you have if they grant you a loan modification. This action should be backed up with help from a local mortgage modification firm or company.

In the current economic climate, we, the homeowners, are led to believe that banks, mortgage agencies and lenders are the enemies. This is not the case. Keep in mind that it is in the interest of lenders to keep homeowners at home, nothing more than to prevent banks and credit houses from incurring debt by keeping vacant properties.

Why Would A Bank Agree To Modify A Mortgage?

Banks are making money for their investors. It is true that after the seizure, the bank owns the property, but in most cases, it is not a lucrative transaction for the bank. You can see that the bank is hit by legal fees, transaction fees, processing fees, as well as additional marketing fees for the sale of a property on which it now stands. In many cases, banks lose far more money than they could earn.

In the long run, it is more profitable for the lender to work with the landlord to change the terms and conditions of their loan so that they can continue to make payments of principal and interest to the bank.

In almost all cases, the bank will win even with a loan modification due to the payment of accrued interest over the modified term of the loan.

SHORT SALE: An Alternative to Mortgage Modification

A short sale is a special arrangement with your mortgage company that allows you to sell your home or business property at less than the balance of your loan. If the lender accepts a short sale, you can usually avoid foreclosure. However, you must assign your property to the new buyer. The advantage of a short sale for you is that you can often clear your account without the stigma of a foreclosure appearing on your credit report. Banks like short sales because they receive a guaranteed sum in advance and do not have to spend money trying to recover a bad mortgage or prevent foreclosure. A foreclosure lawyer can guide you through this process if you decide it’s the best solution for you.

A lawyer can help you avoid two pitfalls of short selling. First, it can negotiate terms that will cancel the balance of your loan that is not covered by the sale. Your lawyer can also help you with the other trap, the US government. In many situations, the government will consider canceled debt as earned income. Thus, without the help of competent legal counsel, your life could become even more devastated by the tax bill you receive.

In conclusion, there could be several reasons why you have been facing foreclosure. You have fallen behind in your payments after a job loss or serious illness in the family. Anyway, you now worry about foreclosure and you want to try to prevent this from happening. Before, you may not have seen any viable way of overcoming this obstacle, but the fact that you read this is proof that you are ready to consider some options. You are trying to seek help and we have proposed worthwhile alternative solutions to take into account.