Loan Modification

Loan Modification:
If you have fallen behind on your mortgage, it is important you know that there are almost always options that will help you avoid foreclosure and the loss of your home. At First Legal we have an experienced team of attorneys and negotiators who have helped hundreds of homeowners in South Florida work through the often frustrating process of getting a loan modification. Starting with our initial free consultation we can help you identify your best loan modification options and will work side by side with you to pursue a resolution that will maximize the savings you can get by aggressively negotiating an interest rate reduction and principal forgiveness.

Loan Modification Hurdles:
The fact is most lenders want to avoid foreclosures. They’re time consuming and have costly legal fees, the foreclosure sale frequently brings in less than the remaining loan amount due, and any remaining balance is hard to collect. A loan modification gives the borrower additional time to pay, often with a lower monthly payment to better fit into their budget. The lender will agree to this because it increases the likelihood of them being repaid and avoids the costs of foreclosure.

While all of the above is true, unfortunately, getting a loan modification is not as simple as it sounds.

  • Never ending document requests: To apply for a loan modification your lender will request an extensive list of documents and forms that need to be provided in a very specific manner and within very tight deadlines. Even if you provide everything your lender requests within the timeframes they request it and you think you are well on your way to a modification, you will often times be surprised to hear back from your lender, usually via a letter, that they need additional documents, updated copies of the same documents or even the whole list of documents again since they claim to have never received it!

While the bank takes its time processing your paperwork, assuming they ever stop asking you for updated documents, your past due balance will continue to grow and you will accumulate even more late fees. If your lender has not filed a foreclosure lawsuit against you already, the delay in processing a loan modification might lead to a foreclosure action being initiated, at which point the bank will tack on additional attorney fees and court costs to your past due balance. Every delay will make it harder and harder for you to get an affordable loan modification.

  • Applying for a loan modification on your own without knowing the different program requirements can be like shooting at a target while blindfolded. One of the major downsides of working on a loan modification without the assistance of an experienced attorney is that you usually do not know what you are applying for. When you fall behind your lender will start sending you repeated letters with loan modification application packages. Not knowing exactly what the banks are looking for and how to best present it, can not only lead to expensive time delays, but also to a modification that barely reduces your payment and does nothing for your principal balance.

Getting the most out of your modification the first time around can not only save you time and money, but accepting a modification means you have less option in the future should you need to modify your loan again. It is criticl to get it right the first time. Furthermore, often times when you accept a modification your lender will ask you to sign a series of documents where they might ask you to waive certain rights or claims you might have against your lender. It is important to have an attorney review and explain any documents you sign that will alter the rights and obligations of your mortgage.

What we do:

At First Legal we have the knowledge and experience necessary to avoid most of the pitfalls that derail a loan modification process. Our team of experienced attorneys and negotiators can make sure you are maximizing your savings through the life of your loan ensuring you find a permanent solution to your mortgage problem and do not need to go through everything all over again in a short time.

Having negotiated with most major banks and servicers, at First Legal we have developed an efficient strategy to assist you in getting a loan modification. We will make sure the loan modification proposal we submit to your lender will comply with all of their specific requirements to avoid having to send multiple resubmissions. Once we have submitted a loan modification proposal we will make sure your lender is reviewing it in a timely and competent manner to avoid unnecessary delays that cost you money and put your home at risk. Lastly, we will work with you to make sure the target payment we are aiming for is something you can afford.

  • Factors to consider:
    • Is the market value of your home less than what you owe on your loan?
    • Are you behind or about to fall behind on payments?
    • Are you in foreclosure?
    • Have you recently lost your job, gone through a divorce or medical hardship that has reduced your income?
    • Is your loan an interest only loan, or an adjustable rate loan?
    • Has your lender force-placed insurance causing your loan payment to skyrocket?
    • Have you gotten a modification before but your financial situation has now changed or your interest rate is set to increase again?
    • Fallen behind on a second mortgage or home equity line of credit?

If any of these factors apply to you, you might be a good candidate for a loan modification. At First Legal our attorneys will sit down with you at our initial free consultation and go over your specific circumstances and the terms of your loan and we will help you determine if a loan modification is right for you.

  • Plans available: If after our initial free consultation we determine that pursuing a loan modification is the right solution for you there are several plans we can apply for depending on your specific needs, goals and financial situation.
  • Home Affordable Modification Program (HAMP): Under this program we can negotiate a more affordable payment by adjusting your interest rate (it can go as low as 2%), extending the term of your loan or delaying repayment and interest accumulation on a portion of your principal. HAMP applies both to residential and investment properties and if you owe significantly more than what the property is worth we can even pursue a principal reduction.
  • Second Lien Modification Program (2MP): If you also have a second mortgage you are struggling to pay, we can assist your qualify for HAMP and then modify the terms of your second mortgage as well without having to apply multiple times. Not only will you save time and money but by dealing both mortgages at once we can ensure that your overall mortgage payment is something you can afford.
  • HAMP Tier 2: This is an expanded program designed to allow more homeowner who are struggling with their mortgage find a solution. Even you received and defaulted on a HAMP modification in the past, HAMP Tier 2 might allow you to reapply and get a new loan modification under favorable terms. Through this program we can also assist homeowners who are temporarily unemployed apply for 12 months of unemployment forbearance.
  • Shared Appreciation Modification Program (SAM): Under this program your lender will agree to reduce your principal to bring the loan value closer to the market value of the property and restore your equity. If down the line your property value goes up, when you want to sell your home your lender will be entitled to a percentage of the increase in equity.
  • In-House Modification Programs: Most banks and services will participate in some if not all of the programs listed above. However, if those programs are not ideally suited for your situation or your lender does not participate in them, most lenders have in-house options that often mirror some of the programs above. Having worked with most lender we are familiar with the requirements necessary to qualify for an in-house modification option and can help you qualify for one.

Whether you have an FHA, Freddie Mac, Fannie Mae or other type of loan, our team of experts can usually find a loan modification plan that will best fit your needs.  Even if you have received a modification in the past or have applied and been denied for a modification, our team of attorneys can assist you find alternatives to foreclosure that will help you save your home.

Important things to know:

  • The sooner you star the better… but it is also never too late to take action to save your home

For answers to the most common questions you might have please visit our Frequently Asked Questions page or schedule a free consultation with one of our attorneys.