Financial problems can happen at any time. But that doesn’t have to mean foreclosure. A loan modification is the one way to get rid of the stress that comes with a reduction in income.
Mortgages often make up the largest section of debt for an American family. But when times are tough, this financial burden can put a strain on the family’s resources, especially if they’re having difficulty making payments.
But there’s hope. If you have been paying your loan consistently for a number of years, you may be eligible for a loan modification. This restructuring of debt is actually very common, and can be used to reduce your monthly payments.
Be advised, however, that the length of your loan may increase.
Challenges in Loan Modifications
Once you have decided to take a loan modification, it is vital to have basic knowledge of the terms and the process that comes with it. Loan modifications, in general, are not tough to get. Lenders usually avoid foreclosures as the process that comes with it is very tedious and costly. Many legal procedures are required, and a foreclosed home generally sells for less than market value, decreasing the lender’s profitability.
A loan modification is generally more straightforward and a win-win situation for both parties. The result is typically a longer loan period with a lower monthly payment. This also increases the likelihood that the lender will recover their investment and avoid costly foreclosure procedures. There are a number of factors to consider when requesting a loan modification. They include:
- Document requests: Your lender will require a large amount of documents that need to be delivered within a certain period of time and also filled out in a certain way.
- Even if you’ve filled everything out, the documents may need to be updated each month, or even filled out from start to finish again because the lender may not have recieved it!
- Continue payment of your mortgage: if you default on your mortgage payments during the loan restructuring, the lender may automatically file a lawsuit against you even though you’re currently working with them to modify the loan!
- Not using an attorney can be trouble: Loan modification is a general term used to describe the large group of modification types that a person may request or qualify for. Applying for a modification that doesn’t suit your needs can be hectic. You face the risk of being declined total or getting into a bigger mess. Loan modification comes in many forms, and you should only get the right one. It’s important to seek legal counsel in order to correctly apply for the type of loan modification that will help you in the long run.
Documents also take a long time to be approved. As the approval process is ongoing, the fees that you are supposed to be paying will continue to accumulate. This will not only hurt your pockets but also potentially affect your credit score. While an approval will be very pivotal to your finances, the situation can worsen when you are awaiting approval. The sting will be felt more if your loan modification is not approved.
A loan modification is not as easy as it sounds. There are several conditions that have to be met for it to be successful. Applying for a loan modification alone can lead to it being more challenging. There are many things that you should know and deep legal procedures that you cannot prepare yourself enough for. For first-time applicants, success will help you get a higher chance of winning other loan modifications in the future, if required. Getting help with your loan modification process will increase your chances of success, at the same time, reducing the stress that you would have to undergo in the process.
That’s why at Siddons Law, we offer loan modification services for those undergoing financial problems.
What A Legal Team Will Do for You
The best way to handle your loan modification request is by letting a professional legal team do it for you. At Siddons Law, you will be taken through the whole process. We will talk you through the different plans and guide you on every step to take until the mortgage modification is successful. We create a valuable relationship with all our clients, looking to enhance the communication between the parties in the loan modification process.
Experience can never go wrong. Whether you are applying for a loan modification for the first time or a third, the legal knowledge that one has isn’t close to that of a law firm. Knowing the process and having the technical know-how are two very different things. In that sense, working with a firm that has years of experience in loan modification will help push your case to better heights. An experienced law firm knows how the system works and the best way to fend for you when looking to get a loan modification.
Increasing your chances of success in a loan modification application is the top priority. We will ensure that you get whatever type of modification that you need. We are a customer-oriented team, and we care about getting you quality results.
Having a legal team by your side will increase your chances of loan modification acceptance. Moreover, you are more likely to benefit from a better deal, with lower interest rates and even a reduction in the total loan amount you are required to pay
- In-House modification programs: In- House modification programs are those that the terms depend on the lender. This means that your lender doesn’t participate in the usual modification programs and has their own terms with which you will have to comply with.
- Share Appreciation Modification Program: In this program, your lender will agree to bring down your principal, bringing down the loan value close to the market value of the property, making it easier for you to pay. If the price of the property increases in value over time and you decide to sell, the lender will be entitled to a certain percentage of the selling price.
- Home Affordable Modification Program (HAMP): In this program, negotiation is done so that payment is made more affordable by making adjustments to key loan payment factors such as interest rate, extending the term of the loan, or delaying repayment nd interest accumulation on a portion of your principal. HAMP can significantly help reduce the loan payment.
- HAMP Tier 2: People who had taken a HAMP and defaulted it are the most common pursuers of this loan. HAMP Tier 2 is an expanded loan modification program set to help more homeowners to be able to qualify for a modification. Unemployed people can also seek this modification, which can allow them a 12-month tolerance from the loan.
- Second Lien Modification Program (2MP): At times, you may have more than one loan in your hands. This program will allow us to help you apply for HAMP in more than one of your mortgages at the same time. This will save you a lot of time, money, and energy in your search for a loan modification.
Risks of Not Taking A Loan Modification
If you’re unable to make payments on your home, there can be substantial consequences. You may lose your home in foreclosure. This can be devastating, especially if you’ve been paying your mortgage for a considerable amount of time, and recently came under dire financial circumstances. Loan modifications give you a chance to adjust the terms of their loan to reduce monthly payments and keep your home. This will help you to be in your comfort zone in terms of loan repayment. Your mortgage payment shouldn’t distort your budget.
Your credit score could also be severely impacted, decreasing your chances of getting good loan terms — or even getting a loan at all in the future!
Loan modifications do not impact your credit score in a meaningful way over the long term. Restructuring of your loan will allow you to continue making monthly payments and keep your home.
At Siddons Law, we have a team that is highly-skilled and proficient in mortgage modification. We care about our clients and do all it takes to find a solution to the financial crisis. If you are looking to avoid foreclosure or getting a dip in credit scores for defaulting, contact us. We will lead the way for you.
Call us at (610) 255-7500 or find us at The Law Offices Of Michael Alan Siddons, Esquire. Media, Pa 230 North Monroe Street, Suite A Media, Pa 19063.
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