If you’re the owner of rental property in Dade, Broward or West Palm Beach County who is facing the threat of foreclosure, there are issues unique to investors, that a lawyer practiced in loan modification law can help you to become aware of. Furthermore a qualified loan modification attorney can assist you in making your properties profitable again with positive cash flow. Let’s start with the basics:
An investment property is a property that is:
- not your primary residence, and
- is purchased in order to generate income, profit from appreciation, or to take advantage of certain tax benefits.
Rental property is a type of investment property.
Foreclosures have been a common occurrence in Miami-Dade, Broward, and Palm Beach housing since the 2008 housing crisis. Consequently, loan modification programs were created as a means for underwater and otherwise struggling homeowners to avoid losing their homes. The standards that HAMP put into place have helped to assist the aforementioned homeowners in Florida, as well as homeowners nationwide.
A modification adjusts the current terms and conditions of your mortgage loan. Typically, the lender agrees to lower the interest rate or lengthen the repayment term and bring your monthly payments down to something significantly more manageable.
Loan Modification in Miami-Dade, Broward, and Palm Beach has traditionally only been available to help borrowers with mortgages secured by their primary residence. As of 2012 however, the federal government has expanded its modification program (HAMP). Changes to HAMP have extended eligibility to include owners of investment properties. These modifications include certain qualifying investment properties, that an experienced loan modification attorney who knows the South Florida mortgage landscape will be intimately aware of. Non-participating lenders may also offer modifications for rental property, with their own sets of guidelines that your loan modification attorney will outline for you. For example, the borrower might want to modify a loan to avoid foreclosure or a short sale due to negative equity on the investment property. Your lawyer will advocate on your behalf and advance these issues among others, as he assists you in qualifying for the appropriate loan modification plan.
For your property to qualify for a modification through the HAMP program, there are basic eligibility requirements. First, the property has to be occupied by a tenant that considers the home his primary residence, or the property must be completely vacant. Your loan modifications attorney will advise you that you’ll also need to sign a written statement. The statement typically avers that you intend to rent the property out for at least the next five years and that you will try to rent it out as soon as possible if it is in fact, vacant.
Delinquent loan payments, financial hardship (you must be at least two payments behind) and sufficient (documented) income to support the requisite modified payment system are factors that will help you qualify for a loan modification program. Additionally, there are loan amount thresholds for investment properties that your loan modification attorney will be aware of. The time your mortgage was secured may also be an important factor. These limits are applicable whether the property is used as a rental property or as a primary residence.
If you don’t meet the requirements for HAMP, your attorney can negotiate with your mortgage lender to see if there are other circumstances (inadequate rental income, HOA assessments, taxes or property insurance arrearages) by which you may be able to justify a modification on the loan.
You’ll want to have your loan modifications attorney reach out to your lender to discuss your case-specific potential modification options.