Help With Home Mortgage Modifications

While bankruptcy will put a temporary halt to any collection or foreclosure proceedings against your home on the part of mortgage companies or banks, a loan modification may prevent foreclosure as well. A loan modification can provide you with relief through tools such as lowering your interest rate, changing your interest rate from adjustable to fixed, extending the repayment term of your note or, in rare instances, reducing the principal amount owed. In most of these instances, your monthly mortgage payment will be reduced.

However, banks do not have a legal obligation to offer a loan modification. In some cases, people are asked to submit a hardship letter and a financial plan indicating they have the resources needed to pay their mortgage if a loan modification is offered. If you are behind in your mortgage, your bank may be willing to offer a repayment plan that allows you to pay a little extra each month until your past-due mortgage is paid in full.

If you are considering asking for a loan modification or would like information on filing for bankruptcy, call James H. Monroe today to schedule a free consultation: 407-917-4147.

Asking For A Loan Modification

Mortgage modification procedures can be lengthy and frustrating. Many lending institutions have their own modification procedures. However, many have signed a contract with the government to offer services under the Making Home Affordable program. Both programs offer assistance to individuals seeking to lower their payments or to catch up on back payments. While some of the individual lenders require the homeowner to be a couple of months behind in their mortgage payments before they are eligible for modification assistance, the Making Home Affordable program does not. Homeowners can also call the HOPE line at 888-995-4673 to receive assistance with the Making Home Affordable modification program.

Some of the items you will need to provide while going through the mortgage modification process are:

  • A hardship letter
  • An itemization of your monthly expenses
  • Two months of bank statements
  • Your tax returns for the last two years

The Importance Of A Hardship Letter

Preparing a hardship letter allows you to explain how a layoff, illness, drop in business revenue or divorce has impacted your ability to make monthly mortgage payments. Your bank may ask to see other information to confirm what you claim in your hardship letter. Consequently, it's important to provide facts that can be verified and information that is tied directly to your financial situation. Additionally, your bank will expect you to explain how a loan modification will help you pay your mortgage. As such, you may want to discuss your situation with an experienced attorney, who can help you draft a hardship letter.

What Are My Options Aside From Home Loan Modification?

If you are having increasing difficulty making monthly mortgage payments, are behind in your payments or have been turned down for a mortgage modification, filing for Chapter 7 or Chapter 13 bankruptcy might be in your best interest. Filing for bankruptcy will initiate a temporary stay of relief that puts a temporary halt to any collection or foreclosure actions on the part of mortgage holders, creditors and banks. This is particularly important if your home is valued at less than what your mortgage is for.

Call Or Email Us Today

For more information regarding home loan modifications and foreclosure, contact bankruptcy attorney James H. Monroe today to schedule a free consultation regarding your case.