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Is it better to hire mortgage modification lawyers for loan modification?

Due to the hard financial conditions, many homeowners often face foreclosures as they are not being able to afford their mortgage. If you are one of them, you will definitely need the help of mortgage modification lawyers. Let us first try to understand what are mortgage and foreclosure?

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You can pledge your interests and rights to a property you are purchasing or have purchased, as collateral for a loan. This is what is known as a mortgage. The lenders will then provide you with the payment schedules and interest rates. If the terms and conditions are mutually agreed upon, a mortgage deal is closed. Now, this deal can end in two ways: either you repay the loan with interest or all the deadlines are failed and the lender claims the property. The second case is known as foreclosure.  

The best way to avoid a foreclosure is to make the payments regularly and make them on time. But, there might be some unexpected situations like losing the job or any other emergency which can have adverse effects on the finances. These instances will definitely affect the ability to pay the mortgage loan. This is when a modification attorney is needed.

What is the job of the mortgage modification lawyers?

One of the ways of avoiding foreclosure is to apply for a loan modification. All the lenders are not ready to offer this alternative but most of the banks do. To negotiate better arrangements of loan there is a need for a mortgage modification attorney.

The banks have many requirements before they grant loan modifications. These lawyers analyze whether or not you will qualify for this alternative if you have failed to make payments. As the eligibility is determined, they help in collecting and arranging all the requirements the bank demands. This will include application forms, bank statements, pay stubs and other income proofs. They also review the insurance policies, taxes and debt-to-income ratio and delinquency status if there are any. With the help of all this information, they will recommend and file the best loan arrangement. The mortgage lawyer is familiar with every kind of format the bank requires and can make the preparations accordingly.

Once all the documents are submitted and all the requirements have been met, it is entirely the lawyer’s responsibility to follow up the loan modification process. They are the ones who will remind the bank to facilitate the process of approval.

What happens after receiving a loan modification?

You will not receive an immediate notification but till any further intimation, you can retain the house. The bank provides an initial approval and puts the borrower on a trial period. A temporary modification for three months will be given and by this time, it will be determined whether this new rate can be handled or not. The permanent approval will be received after the mortgage payments are made regularly and promptly. The bank will use this modified mortgage rate during the trial period as the permanently reduced amount.

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