Why retain an attorney to help you with your loan modification application?
In the last few years, the number of so-called “loan modification companies” has increased
sharply and many homeowners are attempting to get their mortgage modified through these companies.
There are even lawyers that pay advertising firms to get on the radio and TV, but when they
retain these clients, they then hand off the real work to the non-lawyers to process the paperwork.
There are many reasons why this could be a big mistake. For starters, many companies really
don’t know what they’re doing! Often issues are handled by non-attorneys who previously worked
for a lender. They think this makes them an expert so they start up a business offering nationwide
loan modification services. Many of these companies do not know how to properly handle matters
and they “mess up” the loan modification. Often you don’t get the best terms because paperwork
is not done properly. There have been government “crack downs” on these firms.
Some loan modification companies try to mislead people by stating they guarantee a loan modification.
I have had people tell me they had a signed GUARANTEE from a company that messed up the loan
modification where the house fell into foreclosure. There was no real guarantee.
The loan modification company went out of business. The truth is that the lender is NOT obligated
to give you a loan modification, and in order to get one, you need to apply PROPERLY.
A loan modification is largely a legal process. Non-attorney “debt relief companies” often don’t
even know the intricacies of the ever changing law applicable to modifications. Your goal should
be to increase the odds that you’ll get approved. To do this, you should retain an experienced
local licensed attorney in order to ensure you have the best probability of achieving loan
modification success. A loan modification may enable the homeowner to reduce their interest
rate and lower their mortgage payments. In many cases, it is also possible to actually get
the outstanding principal reduced as well. This is especially true when there is a second
mortgage involved and when the property is worth less than the outstanding mortgage. With
loan modifications, countless clients have told me that the lenders were not really willing
to help UNTIL the client obtained legal representation. An experienced attorney can often assist
you in obtaining better results than you’d be able to obtain yourself. For example, if you receive
a 4% loan modification when you COULD have obtained a 2% loan with an attorney’s assistance,
this will cost you!
It’s not uncommon to see an attorney attain lower rates for homeowners.
Graduated payments plans are also possible in many instances. This is where a
bank will approve a low rate for one year, increase it maybe one percent the
second year, and then again for the remaining years. Many times they also agree
to forgive overdue interest and penalties.
a good attorney knows the right way to talk to lenders.
A loan modification attorney will look at your case from a legal point of view.
Lenders are far more likely to respond fairly and appropriately when a
knowledgeable attorney is managing the process.
Attorneys can “buy you time” when needed. If you attempt a modification on your
own, you might get passed around from representative to representative without
really moving forward. And if you’re already facing foreclosure, you can’t
afford to waste time. A lawyer can slow down a foreclosure even while it’s under way,
giving you more time to recover your finances while they work on saving your home.
If a lender is being difficult, an attorney can help a file a bankruptcy to stop
the foreclosure. Also, an attorney can file a motion to stop a foreclosure sale.
Lenders are often difficult to work with for many reasons.
Often you get different answers from different service representatives every
time you contact your lender and there is often turnover.
The lender is not set up to help you unless you already know exactly what they require.
If you’re working with a New York attorney, verify their license here: