Most Commonly Asked Loan
Modification Questions
What is a Loan Modification?
A loan modification (loan mod) is a permanent change to the terms of your home mortgage. Doing a loan mod brings your mortgage current if you are late on your payments and stops the collection calls from your lender. A loan mod can include lowering your interest rate and monthly payment, a longer loan term to lower your payment, principal reduction if you are upside down, forgiveness of delinquent payments and penalties or some combination of all of these.
How do I know if I qualify for a Loan Mod?
The only way a bank will modify your mortgage loan is if they feel you have a legitimate hardship preventing you from making your monthly mortage payments. As we evaluate your situation using your financial data (paycheck stubs, bank statements and the reason behind your particular hardship) that you have provided, our team begins to negotiate directly with your lender to insure the best possible solution for you, not your lender.
Can I get a Loan Mod if I am not late on my mortgage?
Absolutely. Many lenders will accept our solution of a loan mod before a borrower becomes delinquent.
Does a Loan Mod stop a foreclosure?
The innovative negotiation strategies employed by the attorneys at SB Law Center have proven successful in delaying foreclosure proceedings for our clients. Our Notice of Sale Pushback program gives us enough time to engage your lender in a loan modification negotiation.
If I am currently late on my mortgage, what happens to those missed payments?
In many cases we are able to successfully negotiate with your lender to add those payments back into the principal balance of your loan. However, many lenders are now looking for some sort of "good faith" payment from the borrower to get the modification to take effect. The rationale behind this request from the lender is to demonstrate the borrower's sincerity to rectify the situation. The bank does not want to modify your loan only to have it go delinquent again.
Why would a bank do a Loan Modification rather than a foreclosure?
We all know that the banks exist for them to make money. Politically speaking, the banks need to modify loans to show they are willing to help distressed borrowers. In actuality, they only change those loans the will benefit the bank to change. Each mortgage they consider has to make sense for them financially before they will change the terms. When you attempt to get a loan mod on your own or with a non-profit organization, you have no legal power to encourage the lender to change your mortgage. That is one of the core reasons to employ an attorney to help you.
SBLC shows the lender why it makes sense to agree to work out a new lending arrangement. In turn, the lender may reduce the loan interest rate, reducing monthly payment amounts or change other loan terms to allow for an affordable home loan that enables the homeowners to avoid foreclosure. So a successful loan mod, wisely negotiated by SBLC is in the best interest of both the borrower and the bank.
What is a forebearance?
Forbearance is when a lender agrees to let you delay your payments to them for a short period of time. That doesn't mean the lender has forgiven the debt but just allows you to pay what you owe at a later date. Forbearance can be an option for someone that is experiencing temporary financial difficulty. You sign a forbearance agreement that states the lender will require you to pay the amount you owe at a later date. This is a much better option than going into mortgage foreclosure. These are most effective for people who are temporarily out of work or expect to regain their method of income in the near future.
What if I have already spoken to my bank and they have refused to work with me?
Too often this type of inflexible behavior comes from the mortgage representatives on the front line. They are charged with one duty, collect the payment. Our experienced legal team combined with our long term relationships with the lender gets your lender to listen and ready to renegotiate your loan.
Can I do a California loan modification on my own with my lender?
Of course it is possible to negotiate directly with your lender yourself. However, our clients often tell us nightmare stories of their attempts to work directly with the lender on their own. Some of the most common issues with lenders that borrowers have faced are: different modification guidelines for each lender; incomplete packages get thrown out; no leverage in the negotiations; inability to reach a decision maker and the list goes on. Don't take the risk of disqualifying yourself from getting a loan mod because you don't know the lender rules.
The bottom line is that it is safer to let an attorney represent you in the negotiations with your lender. We know the laws and have the authority to negotiate properly. After all, many people hire experts to represent them in court, do their taxes, fix their cars and to provide medical advice. Your home mortgage is equally important.
For additional information on how a Loan Mod works or to get started on your own California Loan Modification contact us today for a free consultation.
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