Choose the Alternative
Unfortunately, foreclosures are rather common. In 2018, there were 4,676 foreclosures filed against homeowners from January 2018 through October 2018 in Miami-Dade County, Florida. Foreclosure proceedings begin with the filing of a lis pendens and a complaint, usually by a lender or homeowners association. This begins the process of the lender attempting to finalize a foreclosure and take possession of the property. Homeowners at times aren’t fully informed of the many alternatives they have when it comes to a pending foreclosure of their home. One of the ways that a homeowner can avoid a final judgment of foreclosure in a bank foreclosure is through the alternative known as a Loan Modification.
Loan modification is a way that a homeowner can restructure the loan on their property in a more favorable way that allows them to continue making their payments. A loan modification may modify your monthly payments by changing one or more of 3 aspects of your loan:
- Lowering the interest rate – By lowering the interest rate from, for example, 7.9% to 2.9%, the monthly payment drops, and the total amount of interest you pay over the life of the loan is significantly reduced;
- Extending the life of the loan – By extending the life of the loan from, for example, 30 to 40 years, the lender extends the amount of time you have to pay your debt, thus reducing the monthly payments.
- Lowering the loan principal – by lowering the loan principal, the lender forgives a portion of the principal balance of the amount of debt you owe, thus reducing both the monthly payments as well as the amount of money you owe on the property.
Although not simply, a real estate attorney can assist you with you with the loan modification application process. Homeowners have to show evidence that they are facing financial hardship to qualify, as well as the ability to continue to pay a monthly mortgage amount. A loan modification is not only a good alternative for homeowners already in the process of foreclosure, but for homeowners facing foreclosure in the future as well. In order to qualify for a loan modification, different documentation may be requested by the lender:
- Proof of income;
- Copies of bank statements;
- Tax returns for the previous 3 years;
- A hardship letter;
- A monthly budget of expenses; and
- Proof of income of all working adults in the property.
Although Loan Modifications can be a good alternative for relief from the foreclosure process, the process with the lender is usually neither smooth or quick. Due to the various complications of the loan modification process, and the many hurdles that you may have to overcome, hiring a great real estate attorney to help you complete the process is critical. The attorneys at Thompson Legal have been representing individuals in foreclosure cases for over a decade. This representation includes both the loan modification process, as well as litigating these cases in Court all the way through trials. From the on-start of the case, Thompson legal will work with our client’s on the loan modification and speak directly with the bank to gain all of the information the client will need to make the process easier to understand. By having legal representation on your side while going through a foreclosure process, you can avoid deception by your lender and other situations where you may otherwise be blindsided and taken advantage of. At Thompson Legal, we try to make the loan modification process as painless, and as successful, as possible. So if you or a loved one is going through foreclosure or in fear of foreclosure, call today for a free consultation (954) 510-3366 or fill out the Contact Form.