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Mortgage modification may not always provide relief

In recent years, many Florida residents have found themselves in the unfortunate position of potentially losing their homes to foreclosure. This process can be confusing and overwhelming, especially where the foreclosure comes about through circumstances beyond the control of the borrower.

One 57-year-old woman in another state spent more than two years attempting to avoid foreclosure. She has made telephone calls, completed forms, protested her payments and even had meetings with the bank. However, her efforts were in vain. The bank sent the woman a letter that purported to offer relief yet wanted to increase her payments by more than $200 per month, which is not a practical solution for a grandmother struggling to make ends meet. After 12 years in the home, the woman still has not received a reasonable mortgage modification and now faces foreclosure.

This homeowner works, has a job, and can afford to pay a mortgage. However, she is unable to meet the terms of the loan that was given to her. She certainly is not able to pay more than the originally agreed monthly payment amount. Many homeowners in Florida are in a similar situation.

For many people, modification of an existing mortgage is a way to continue to make monthly payments without losing their homes. Unfortunately, the bank is not legally prevented from foreclosing before the modification process is complete. The law also does not require lenders to work with homeowners to avoid foreclosure. Filing for Chapter 13 bankruptcy with the help of a bankruptcy attorney will automatically stay foreclosure proceedings and may give homeowners some additional time. Additionally, many people can structure a bankruptcy in a manner that will allow them to continue making payments and keep their homes.

Source: Huffington Post, "Foreclosure Horror Story: Bank of America Mortgage Modification Allegedly Goes Wrong," March 12, 2013

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James H. Monroe, P.A.
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