Your home is typically your most valuable asset – both in terms of money and emotions. Because of this, Brine Consumer Law understands that keeping your home is of paramount importance. If you’ve fallen behind on mortgage payments, there are many strategies that can be taken to achieve your goal. Each case is different so call today for a free phone consultation.
A loan modification is an agreement with the bank to change the terms of your loan so that they are more affordable. Typically, you will need to show a hardship in making the regular payments in order to be eligible. If approved, the past due amounts (called “arrears”) will be brought current through the loan modification process.
Typically, the terms of a loan modification result in: (1) an increased principal balance due to the capitalization of arrears, (2) a reduction in the interest rate, (3) an increase in the term of the loan to a new period of 30 or 40 years, and (4) a potential agreement to forgive or forbear some amounts. This should result in a reduced monthly payment.
The most well-known modification program is the government’s Home Affordable Modification Program (HAMP), which tries to reduce your payment to 31% of your gross monthly income. Not all banks participate in HAMP, though, and some banks have other programs. For instance, there are additional programs through Fannie Mae, Freddie Mac, and the Federal Housing Administration, just to name a few.
A lawsuit seeking to prevent a foreclosure can take many forms. Among other things, a lawsuit might be based on the bank’s failure to comply with state foreclosure law, its failure to correctly review your loan modification applications, or the predatory nature of the loan in general. A detailed review of your circumstances would be needed to evaluate your potential claims, if any.
Unlike a bankruptcy filing, a bank is not automatically prohibited from continuing foreclosure efforts once a lawsuit is filed. Because of this, it is often best to review your options with an attorney as soon as possible.
If your property has already been foreclosed, then the bank will typically need to bring an eviction action in the housing court to evict you. You may have a defense to this eviction if the foreclosure was wrongfully completed.
A detailed review of your circumstances would be needed in order to determine whether this is an option for you, though. Because this will also need to occur in the limited timeframe that the housing court provides, don’t delay to schedule your free phone consultation today.