You may have been financially sound for years, but currently find yourself in a difficult financial situation that you have never experienced before. In today’s economic climate stable finances can change very rapidly, but don’t lose hope as you have options that can help. Modifying the terms of your mortgage, or any major secured (or even unsecured) loan may reduce your overall debt load. Most lenders, especially mortgage lenders, are always open to talk about ways to help you through challenging times. The last thing your family wants to do is lose their home, and your lender is aware of that.
Loan modifications are common and are often a bankruptcy alternative. Most mortgage lenders already have programs in place that will reduce your current debt. Once updated terms are agreed to, your mortgage (or any other type of loan) will once again become current, and you’ll be able to make a payment that you can financially tolerate every month. These loan modifications usually go on for a specific time, and when you are able, you may be able to revert to the loan’s original terms.
By negotiating a loan modification, you’ll keep your existing loan, but your lender agrees to change its current terms. Your new, modified loan usually may have a lower interest rate, or even have a variable interest rate converted to a fixed rate. The length of your loan term may also be extended, lowering your monthly payments.
It is in your lender’s best interests to consider your current financial circumstances and negotiate to find a solution that helps you pay back the principal. The alternatives, including foreclosure, bankruptcy, repossession, etc., can be extremely costly for you, and your lender or financial institution. Aggressive collections actions, also cost money, and a loan modification may end up being a win-win for both you and your lender.
A loan modification, of one or more loans, is a process that includes a significant amount of documentation, and negotiation so that you obtain the best terms possible. A major factor contributing to successfully negotiating these deals is to work with a local Oklahoma City loan modification attorney. They are professionals that negotiate with lenders daily and will be invaluable for you to obtain the best terms possible, reduce your debt significantly, and make sure you don’t miss any “loopholes” that you may regret later.
How Do I Know If I Qualify For a Loan Modification?
If you are a borrower, and facing financial hardship for a myriad of reasons, you usually can qualify for a loan modification. Commonly, however, eligibility requirements differ from lender to lender. For example, some lenders will require a minimum of late or missed mortgage payments or imminent risk of missing a payment to qualify. Lenders also will certainly ask for details as to what caused your hardship and whether a modification is a viable, short, or long-term path to a financial solution.
Put another way, if you’ve lost your job and no longer have any income, a modification might not be enough, or the correct legal path to get you back on track. If your wages have been reduced (due to a job change or any other factor), you still might be able to make regular monthly payments, if they are reduced to a tolerable amount.
Numerous reasons explain why you might no longer be able to afford your current mortgage, or other payments, which might qualify you for a modification. Remember that lenders will usually always ask for proof of your financial hardship.
Some valid and accepted reasons for hardship include:
- Loss or reduction in income (due to a drop in wages or death of a family member).
- A divorce or separation in the family.
- An increase in your overall housing costs.
- A natural disaster that affects your job, or income.
- New health issues, or an accident that temporarily affects your ability to work.
- Disability or long-term health issues that may affect you permanently.
If you’ve incurred financial hardship, be sure to talk to your lender as soon as possible, and don’t let the situation get out of hand. This can be a detailed and complex legal issue and having professional legal representation will always benefit you.
How Can My Loan Modification Lawyer Help Me?
Any loan modification will include a significant amount of documentation, and negotiation for you to receive the best terms possible. Your experienced Oklahoma City loan modification lawyer will be invaluable for you to obtain the best terms and make sure you don’t miss any options that benefit you.
Just a few of the services they will provide are:
- Talk, negotiate, and communicate with your servicer on a timely and effective basis.
- Utilize any, and all, legal means possible in your defense if your lender claims you are in default. Such as making sure you’ve been given proper written notice and enough time to “cure” the issue.
- Organize your documents, professionally, effectively, and present them timely.
- Help you understand what a loan modification can and cannot do.
- Report issues with mortgage lenders if it becomes necessary to do so.
Having the help of a qualified, empathetic loan modification lawyer can help you in many other ways. Lenders always want as much money as they can get, but your lawyer will always fight on your behalf, not your lenders.
Why Would My Oklahoma Lender Consent To a Loan Modification?
As usual, it’s simply the money involved! Loan modifications tend to be less expensive and time-consuming for your lender.
Your lender does have other options, however, but they are costly, stressful and your lawyer will show that it may not work out for them as successfully.
A few examples of lenders other options are:
- Foreclosure – A mortgage modification is a much better alternative, as they don’t want your home and may lose money on a foreclosure.
- Facilitate a short sale – A “short sale” refers to the sale of your home for less than what you owe on their mortgage, and the lender will lose money also!
- Attempt to collect the money you owe using other means – They may consider wage garnishment, bank levies, or collection agencies which are not as effective and expensive.
- Lose the ability to recover their funds completely – Although it’s severe, if you declare bankruptcy, it usually will temporarily halt a foreclosure, but the lender may then never be able to recoup the funds.
I Currently May Need to Modify My Loan, How Do I Proceed?
Most importantly, don’t lose hope as your lawyer knows proven legal options that will help you modify your loan, and keep your life intact. The loan modification and bankruptcy attorneys at Mitchell & Hammond effectively act on your behalf and aggressively and successfully negotiate with your lender to obtain the best terms possible. Consult with them first, and they will assist in your complete financial recovery!