Mortgage Modifications

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Protecting your home from Brankcruvty with Mortgage Modifications

Where do you turn to when you cant keep up your current house payments but want to keep your house? The news of the last year or two has been full of stories about mortgage loan modifications about countless proposals and programs for changing the terms of home mortgages to help people stay in their homes. It can feel overwhelming. And much has also been said about how many of these programs have not worked, that they are difficult to qualify for, that some don’t help nearly enough, and that some lenders are so backed up with applications that they don’t even return phone calls. And there are so many scams that it is seems so easy to make a mistake. Is it worth even trying to do a mortgage modification, and, if so, how do you go about doing it?

Getting Started

The fact is that mortgage modifications will not work for everyone, but they are helping many thousands of people to hold onto their homes. So it is an option you need to take seriously.

Whether a mortgage modification will be successful for you depends on a few basic reasons: 1) your particular finances, 2) your house value, 3) loan terms, 4) income and 5) luck.

Unfortunately luck plays a large part because which mortgage lender or servicer you happen to have will likely make a big difference. That’s because some of them are much better set up, willing and able than others to do mortgage modifications. Plus what programs are available to you often turns on details about your loan such as whether or not it is an FHA one that you had no reason to think would make any difference to you when you got the loan. And luck also plays a big part because of what happened to your loan after you got it which new lender it was sold to by your originating lender, and whether your loan got securitized, that is sold off as a small part of a big packages of loans, which were then turned into the collateral for the infamous mortgage-backed securities, the toxic assets that did much to cause the current economic mess.

Your personal finances are critical because the various programs available to your lender generally all have rather rigid financial qualifying standards. We don’t have the space here to detail these standards, which vary program to program, but generally they are designed to try to select those people who BOTH truly need a mortgage modification AND would be helped enough by that modification (which can change the mortgage terms only to a certain extent) to be able to keep the house in the long run.

Who to Avoid

Considering how confusing and sometimes arbitrary this whole field can be, you may be tempted to hire one of the thousands of mortgage modification outfits that can be found on the internet and elsewhere. Although some may well be run by well-meaning people, almost all will not give you good advice and will not give you much value for the money they make you pay them. Many of them have been shut down by the authorities, others would be once the authorities catch up on their backload of complaints, and many others disappear on their own (often with their customers money). It is just too risky to give any of your money to them.

What To Do

Instead:

1.) Get solid information from reliable, unbiased sources. See the end of this article.

2.) Directly contact your lender, or loan servicer (whoever you pay your mortgage payment(s) to). Sometimes it is a challenge to know which phone number or department to call. See the end of this article for a list of contact information for specific lenders.

3.) Get a free consultation meeting with a very experienced and knowledgeable attorney, who is legally and ethically required to give you the best advice for your unique situation. I have been helping homeowners like you for more than 20 years. Please click here to schedule a free consultation with my law firm.

If Your Loan Modification is Not Successful

If you find out that you do not qualify to change the terms of your mortgage through your lender, you may have other alternatives. I have helped thousands of homeowners keep their homes. The current economy sometimes presents opportunities for creative solutions that I can help with. For example, your lender may be more flexible once you have an attorney representing you, and if they learn that you are either seriously contemplating or in fact filing a bankruptcy case. My associates and I have been involved in some very successful loan modifications in these contexts.

Conclusion

Mortgage modifications are usually quite challenging to pull off, but they can be well worth the effort considering what is at stake. Use the resources provided here instead of being sucked in by the false promises of the mortgage modification middleman. And at any point in the process contact me, Todd Trierweiler, if you need some solid advice about your personal situation.

Good Resources

1) The federal government Making Home Affordable website for mortgage refinancing and modification, including a telephone hotline and eligibility checklists, and much more: http://makinghomeaffordable.gov/

2) A series of articles by the FDIC (Federal Deposit Insurance Corporation) on mortgage loan modifications and foreclosure prevention: http://www.fdic.gov/consumers/loans/index.html

3) Mortgage Lending Tools & Resources of the Center for Responsible Lending, an organization that has been in the forefront of helping homeowners deal with the foreclosure crisis, preparing important reports and testifying in Congress; this part of their website provides videos and reports on loan modifications, maps and charts, and more:http://www.responsiblelending.org/mortgage-lending/tools-resources/

Report by National Consumer Law Center, Desperate Homeowners: Loan Mod Scammers Step in When Loan Servicers Refuse to Provide Relief, July 2009: http://www.consumerlaw.org/issues/mortgage_servicing/content/LoanModScamsReport0709.pdf

4) Written Testimony by Diane Thompson for National Consumer Law Center, and also for National Association of Consumer Advocates, for U.S. Senate Committee on Banking, Housing, & Urban Affairs, Preserving Homeownership: Progress Needed to Prevent Foreclosures, July 16, 2009: http://www.consumerlaw.org/issues/mortgage_servicing/content/testimony_DT_7-16-09.pdf

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