Loan modification lawyers are heaven-sent for those who are behind their mortgage payments and are facing foreclosure. They act as a mediator between the individual and the bank, putting the client in the best situation to get his loan modified. But wait, what is a mortgage or a loan adaptation anyway?
Mortgage and loan modification for dimwit
To understand how a mortgage and a credit modification works, we must first understand what they mean.
A mortgage is a loan a home buyer gets to pay the seller for a piece of property. The prospective homeowner then owes the mortgage lender or in most cases, the bank, the total amount he borrowed plus the interest.
If the homeowner is not able to meet the agreed terms of payment, he or she is most likely to face a foreclosure where a bank will repossess his home. The home can be auctioned off and the profits that will be gained from that auction will be used to recover the bank’s lost investment.
A loan adjustment, on the other hand, is a term used when banks adjust existing mortgage loans. Loan adjustment, also called “loan-mods,” are accomplished through various programs depending on the individual’s circumstances and finances.
These programs are sponsored by banks themselves or through programs of the government like the Home Affordable Modification Program (HAMP).
If the loan conversion is accepted into a program, the bank may agree on reducing monthly mortgage payments. It may also reduce the interest rates for as low as 2% of the portion of the loan until the whole payment is paid off.
So, why hire a Loan modification lawyer?
Borrowers usually have a hard time applying for loan alteration. The process drains them emotionally and physically. Bank representatives make them go to different departments and give different answers to basic questions. They demand applications, bank statements and pay-stubs. They don’t only do this once– they repeat the request over and over.
By the time you respond, the application has already expired and will need to be resubmitted. This process drags on for months and in some cases, even years. While this is happening, your foreclosure continues. Sometimes your applications can even get denied or lost-who wouldn’t have a nervous breakdown?
Call an experienced loan modification attorney. They will help you understand the whole process and ease your burden. They will review your financial situation and discuss your possible options.
Loan modification attorneys know how to deal with banks and loan modifications. They will prepare your application, in the bank’s desired format, to guarantee a speedy process. Loan modification lawyers will work through the numbers, and present your application in a good fashion. They will be able to use their know-how and experience in negotiating with the banks.
Once a loan modification lawyer accepts you as his client, he will provide an in-depth analysis and review.
Documents to be studied include: financial documents (pay stubs, bank statements, income, expenses), real estate taxes, insurance policies, and debt as opposed to your income. They will determine what your targeted monthly loan amount should be, based on your finances.
Once the application is submitted, the loan modification lawyers constantly follow up with the banks to ensure that the application of the client won’t get “lost” or “misplaced”.
Eventually the client application will be accepted and the bank will put him in a “trial” period. This period will let the client pay a lowered loan amount. After this trial period, the bank will permanently modify the loan to the new, reduced amount.
Loan modification attorneys will help save your home, plus help you afford your home payments.