When Am I Eligible for a Housing Loan Modification?

When you’re facing the risk of foreclosure, it can often feel like you have no recourse other than to leave your home – and that’s exactly what many mortgage lenders want you to believe. However, there are options even when you’re dealing with a significant level of debt, and our skilled foreclosure team can help you examine all of these options with confidence.

In some cases, one of the easiest solutions could be securing a housing loan modification, wherein you could lower your monthly payments and avoid leaving your family home. Of course, your lender can make the entire loan modification process extremely difficult, and you may have to hire an attorney to ensure that you get fair terms on your modified loan.

When Can I Qualify for a Housing Loan Modification?

Getting a housing loan modification depends almost entirely on the willingness of your lender to compromise. Because you still owe them money on your home, the lender is legally entitled to begin foreclosure proceedings very soon after you start to miss payments. However, in practice they often hold off on this process, because foreclosure is expensive.

In order to receive a loan modification offer, the lender essentially has to agree that you are reliable enough to justify lowering your monthly payments or extending the loan terms. In some cases, the lender may reach out to you directly about a loan modification application, without informing you that filling it out will prevent you from pursuing other options in the meantime, such as a short sale. That’s just one of the reasons it’s important to review your case with a qualified attorney as soon as your house is at risk.

Here are some other things to keep in mind when applying for a loan modification:

  • You may be eligible for a government program instead. Although the Home Affordable Modification Program (HAMP) expired at the end of 2016, there are still government refinancing and modification programs available if you received your loan from agencies like the VA, the Federal Housing Administration, or groups like Fannie Mae and Freddie Mac. If in doubt, make sure to ask your lender directly to see if any government programs could apply to your case!
  • If you’re approved for a modification, examine the terms closely. While most loan modifications are not approved at first, some lenders will approve your application only to include problematic hidden terms. From built-in balloon payments to loan terms that extend well past 60 years, it’s important to review the terms of an approved loan modification very carefully before signing.
  • Loan modification application doesn’t prevent foreclosure. When people apply for loan modifications from their lender, they often don’t realize that the clock may still be counting down to foreclosure. This can translate to a lot of wasted time and energy on your part, without actually preventing the loss of your home.

Why Choose Buchalter Law Group?

Unlike your mortgage lender, our legal team is on your side every step of the way. We’re completely committed to your long-term happiness and financial health, and we’ll help you stay the course as you request a loan modification from your mortgage servicer. Once you hire our foreclosure defense lawyers, we can start taking on the mortgage lender on your behalf, using our considerable negotiation skills to work towards a better solution.

Call us today at (321) 320-6088 to schedule a free case evaluation!

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