A loan modification is a restructuring of an existing mortgage where the lender allows changes in the loan terms. The idea is that the debtor can then afford the payments. Loan modifications gained a wider audience after the debt crisis of 2008 turned the real estate market on its head. Faced with the prospect of foreclosing on literally tens of thousands of homes, lenders decided it was better to keep the debtors making payments rather than acquiring the real estate and the expenses they require (taxes, maintenance, etc.).
When a debtor is unable to make timely mortgage payments, lenders can change some of the following terms to make the debt service (payments) more manageable:
- Reduction in the interest rate – can have the effect of lowering the monthly payment to a more manageable level.
- Conversion from a variable to fixed interest rate vehicle – can also reduce monthly payments and hedge the risk of the variable rate rising with certain market conditions
- Forgive some of the principal balance – is sometimes used when the amount of the loans is too oppressive and other techniques fail to help the debtor.
- Extension of the life of the loan – can often time create a more manageable condition because lower payments can be spread out over time.
Mortgage Modification Process
In order to get a loan modification, the debtor submits an application to the loan service provider. The debtor includes with this application a few documents such as pay stubs or W2 forms, bank statements, etc.
In order to qualify debtors must be struggling to meet the mortgage obligations on a monthly basis and are soon to be or already are behind on payments.
Consider Hiring a New Jersey Mortgage Loan Modification Lawyer to Help
Lawyers help people navigate through legal processes – that is their function. Whether you are faced with a criminal charge, involved in a personal injury accident, or need help with the bankruptcy process, lawyers use their skills and expertise in getting you through the process with the goal of achieving the best possible outcome given a specific situation.
Most people never had to deal with being behind on payments to mortgage lenders or any other creditors. Unfortunately, life sometimes has some surprises in store for us. What you don’t want to do is worsen the situation. One way to avoid this is to consult a NJ mortgage loan modification lawyer. To do this is to know all of your options. If your attorney is good, he/she will lay out all of your options in a clear and organized matter. Depending on your personal situation, the lawyer could recommend:
- Attempting a mortgage modification.
- Fighting the foreclosure in court.
- Giving up your property in a short or deed in lieu of foreclosure.
A NJ mortgage modification lawyer can also help you properly fill out the required paperwork and frame your situation is the best possible manner.
Other Benefits of Hiring a NJ Mortgage Modification Lawyer
A lawyer’s job is to know and apply the law. Most people are too caught up in their own lives to be an expert in all possible fields. When you seek legal counsel, you seek that expertise and, although it can come at a cost, that cost could save you tens of thousands of dollars over time.
Consider a situation where the mortgage servicer (the company that you pay) doesn’t comply with state laws governing the foreclosure process. In certain situations pointing out these violations can induce a modification even though it might not meet the servicer’s normal requirements. While you may research these and other nuances yourself, a NJ mortgage modification lawyer has experience in utilizing these facts to the client’s advantage.
Consider also if your modification request is denied, a NJ mortgage modification lawyer could help you present your situation to illustrate an error was made in denying the request.
The use of a NJ mortgage modification lawyer can result in incredible success. Success is defined as keeping your home out of foreclosure and securing more manageable loan terms for the duration of the loan.
The bottom line is that a NJ mortgage modification attorney helps people navigate unfamiliar waters in dealing with foreclosures. Finding and retaining a competent mortgage modification attorney in New Jersey to help you is often an endeavor worth pursuing.
If you have any questions regarding foreclosures and the mortgage modification process, please give us a call. The phone call is free. We are here to help and are at your service. 732-722-7690