Purchasing a home can be one of the biggest purchases you make in a lifetime. For most people, they take out a mortgage loan to pay for the purchase, and then they pay back the mortgage loan according to the terms and conditions set out in the contract.
Sometimes, however, a change may be needed to the mortgage loan. You, your attorney, and the lender can negotiate new terms beneficial to everyone.
What is a loan modification?
A loan modification is a process where you negotiate changes to the original terms of a loan, in this case, your mortgage loan. The modifications create a new agreement. Common changes involve:
- lowering the interest rate;
- lowering monthly payments; and/or
- redistributing any past due payments.
Modifications may seem like they benefit only the borrower, but the lender also benefits: modifications not only make it easier for the borrower to pay back the loan, but it also helps the lender avoid costly foreclosure fees and associated expenses.
When should you request a loan modification in New York?
Borrowers have different reasons why they want to modify a mortgage loan. Below are some of the more common reasons.
- You need the cash due to hardship. Hardships happen, from family medical emergencies to losing a job. Life takes turns, and you never know when that turn is coming up. You will have to prove the hardship by providing things like death certificates, bank account statements, termination letter, etc.
- You have negative equity. Negative equity happens when you owe more on the house than what it is actually worth. When this occurs, you can't refinance, but you may qualify for a loan modification.
- You are about to foreclose. If you are in pre-foreclosure and do not want to lose your home, then you may want to start negotiating with the lender for a modification in the terms and conditions of your loan. The lender would prefer not to foreclose, too, because of the expenses and risk involved with a foreclosure.
There are other reasons, too, that may be specific to your circumstances.
How can a New York Mortgage Loan Attorney Help You?
A New York Mortgage Loan Attorney can help you secure loan modifications and ensure you do not lose your home due to any kind of hardship or value lost in your home. An attorney understands the terms of the original loan and the new agreement you are trying to negotiate. An attorney can identify the hidden language and ensure the term are in your favor.
An attorney can also make sure you do not become a victim of a loan modification scam. There are many out there taking advantage of people and families already in a disadvantaged situation. Any program that requires you to pay upfront fees or is computer generated should raise red flags. Of course, any loan modification program that sounds too good to be true should also raise red flags.
Always get the advice from a competent, experienced mortgage loan attorney in New York first – this one step can save you a lot of financial and emotional hassle and stress later.