What is a Loan Modification?
Homes are bought or built on hope. The hope that it’s the place where traditions are built, children are raised and sweet years are spent. The hope that the residence that you purchase will reflect your personal style and values. As we all know, life happens- companies lay off employees, divorces are filed, we become ill. These incidents can have a dramatic effect on our finances and our ability to maintain home ownership. Thankfully there is a solution that can allow you to keep your home and lower your mortgage payments.
Loan modifications are programs in which a lender changes the terms or structure of a mortgage loan to prevent default. The most common aspects of a the mortgage loan that can be adjusted include, a reduction in the monthly payment, principal of the loan or interest rate or lengthening the terms of the loan to account for missed payments.
Your mortgage loan does not have to be in default for you to qualify for a loan modification. You just have to demonstrate that if the terms of your loan aren’t adjusted that you will likely to default. To demonstrate that, borrowers must request a loan modification and submit financial information to their lender. This will include information about your current income and debt and mortgage payment information. You may submit tax return information, credit reports and your pay stubs. The idea is to provide as much information as possible to establish that you are experiencing a financial hardship and that and adjustment to the terms of your mortgage will allow you to keep your house. Once information has been submitted to your lender, it’s a waiting game. The best action you can take is follow-up with them periodically to check the status of your application.
The federal government can assist you getting a loan modification as well. The Home Affordable Modification Program (HAMP), which is part of the government’s Making Home Affordable Program, was created to help homeowners avoid foreclosure. To qualify, homeowners must prove that they fit the following criteria:
- Obtained your mortgage on or before January 1, 2009.
- Owe up to $729,750 on a primary residence or single unit rental property.
- Owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property.
- Own a property that has not been condemned.
- Have a financial hardship and are either delinquent or in danger of falling behind on mortgage payments (non-owner occupants must be delinquent in order to qualify).
- Have sufficient, documented income to support a modified payment.
- Must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
The specifics of obtaining a loan modification can be confusing, but we can help. If you are facing a financial hardship and are concerned about keeping your home, talk to the loan modification attorneys at the McIntyre Law Firm. We will help you examine your situation and help you develop the best solution for your needs. Contact us today at 844-511-4800.