Realities of a Loan Modification
On a continuous basis I see clients, as well as Realtors, who are interested in a loan modification. These individuals are clearly behind on their payments for a mortgage which is upside down. Upon falling behind, they are usually contacted by their lender. The client/realtor usually receives notification from their lender expressing interest in working with them through a loan modification. The lender will usually require that proper documentation be submitted, which generally includes bank statements, a hardship letter and tax returns, proof of income, etc. Once this documentation has been submitted, the lender usually responds with an offer to put this person on some kind of trial run, such as a three month payment period or something of a different nature. In order to undergo the so-called modification, one person that I know was required to pay a $20,000 lump sum payment in order to get a deferral on their remaining backlog of late payments. Typically, I have to explain to a client that the loan modification is usually not going meet their expectation if their expectation is a considerable reduction in principle balance...Income is one of the determining factors for a loan modification. Further, many lenders stress government programs to aid in loan modifications (such as the HAMP program). But, as of date, I have yet to see one actually go through.
In conclusion, I want you to understand that the expectation of a loan modification to be anything other than a reduction of interest rate is unrealistic (emphasis mine). This is a drop in the bucket if you are so upside down and behind on your payments and will not be of substantial value to prevent the loss of your home...As always, if you have any questions or need additional information, please feel free to email me.
Until next time,
Don Gonzalez, Esq
Don Gonzalez, P.A. provides the information in this email as a service to its email readers. While the information on this site deals with legal issues, it does not constitute legal advice. If you have questions related to the application of law to your specific circumstance, you are encouraged to consult an attorney who can investigate the particular issues of your situation.
DON GONZALEZ, P.A.
Attorney At Law
1820 N. Corporate Lakes Blvd.
Suite 201
Weston, FL 33326
954-598-0660
http://www.dongonzalezpa.us/
DonGonzalez@aol.com
