A term rapidly increasing in popularity is Mortgage loan modifications because mortgage companies are becoming more willing to work out payment reductions for people whose monthly payments are causing them to become overburdened. Lenders will offer a mortgage loan modification instead of seeing the borrowers deal with foreclosure and abandoning their homes. There is a variety of new ways to calculate the new payment. Mortgage companies can use government programs like HAMP or their own guidelines to calculate your ability to pay. The main thing to keep in mind if that your mortgage company is not required to modify your loan.
Mortgage loan modifications can be intricate and consume a lot of time when working with lenders. The longer your loan modification takes, if you are already behind on your mortgage, can further damage your credit due to late fees. This ultimately can push you closer to foreclosure if it is not successful. Mortgage loan modifications are usually temporary, this means you are put under a period of time with lower of sometimes high payments. When this time has ended, you could have to re-apply. This can drag on for months to years before you find your permanent loan modification payment. In certain cases, knowing the final modification payment, would have made you agree to the trial payments.
If you are considering a mortgage loan modification, whether behind or current on your loan, our bankruptcy lawyers can help you evaluate the different options with your lender.
Often the need for a loan modification starts from being overburdened with other debt, meaning it is not only hard to pay your mortgage, but you are also paying credit card and other debt making the payment even more difficult. When you come to this crossroad you may choose to try and modify their mortgage loan AND file a Chapter 7 to eliminate their other debt. If you are not happy with the mortgage modification, then the Chapter 7 can provide an opportunity to walk away from the property without owing the balance as well as eliminating other debt.
It can be extremely difficult to walk away and leave your home, but getting a fresh start, rebuilding your credit, and owning a home with a reasonable payment in the future, is a motivating goal of Chapter 7 bankruptcy for many clients.
Traditional Chapter 13 bankruptcy can give you a catch up plan on overdue mortgage loan payments and avoid foreclosure, and it continues to successfully do just that. But this isn’t a universal fix, especially when income has changed or houses are not worth what they once were. How can you catch up on your home when you can’t afford your mortgage payment?. Chapter 13 bankruptcy now offers an additional option in our district, Mortgage Modification Mediation through the bankruptcy court. The two greatest benefits of modification through the Chapter 13 process are 1) a judge signs an Order specifying the guidelines for your mortgage company to engage in mediation, including enforceable timelines and procedures; and 2) you are protected by bankruptcy during this process. Clients are finding success in this program not only with HAMP loans, but with other types of modification programs offered by their mortgage companies. Especially when previous attempts to modify your loan have failed, Mortgage Modification Mediation through a Chapter 13 bankruptcy shows a homeowner means business. This is also great way to take advantage of the bankruptcy court's power to strip second and third mortgages. Call the Law Offices of Keith D. Collier in Orlando for your FREE consultation to discuss a Chapter 13 bankruptcy with a Mortgage Modification Mediation.