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Mortgage Loan Modifications

The Problem

     You’ve fallen into hard times. You missed a mortgage payment, then a second, then a third, and the next thing you know you’re getting letters from every debt consolidation joint in town, telling you that you’ll lose your house in a foreclosure sale unless you sign up with them. How did they know? How did they find out? You’re reeling, and now you’ve missed a fourth payment, then a fifth, and now you get a different kind of letter: a notice from a law firm representing the bank who is telling you in no uncertain terms that in ninety days the bank will take you to court and start the foreclosure process. Suddenly, you are faced with the very real prospect of losing your home.

How I Can Help

     The good news is that the first step in the foreclosure process after the summons & complaint are served and answered, is the loan modification stage during which you will try to negotiate a new, more affordable mortgage with the bank, possibly with a lower interest rate and a longer term, and usually with the arrears from the previous mortgage rolled into the back in an interest-free component that you only pay off when you sell the house. There are no guarantees, and not everyone qualifies for a loan modification, but the good news is that the bank is obligated to negotiate with you in good faith.


     Loan modifications are also available if you go straight into bankruptcy. I’ve always liked my client’s chances better in bankruptcy court than in foreclosure court, because In bankruptcy court the process is supervised by a federal judge, looking down from the bench where she sits in her judge’s robes, while in foreclosure court the process is supervised by someone called a “referee” who sits with the parties at a table and there is no judge in sight. The referee’s – no offense – just don’t command the respect and attention that federal judges do.


     I have successfully modified dozens of loans for my clients, some of which were years in arrears, and I fight for my clients to the bitter end to try to save their homes. Be advised, though, that if you hire me to modify your loan, you may not like me very much. The key to success in loan modifications is quick turnaround. If the bank asks for additional, updated documents during the loan mod process, I will require that we get those documents back to them within 24 hours. And that means I will be on the phone to you right away suggesting very strongly that you put your life on hold for an hour and get me the requested documents pronto. You have to show the banks that you are serious and you have to show them that you won’t be discouraged and you won’t quit. You may hate me during the process, but you’ll love me when you get that modification and that fresh start.


     One more thing: people seeking home loan modifications often think they have to cry poverty to get a loan modification so they tend to downplay their income on the application. Not good. What the banks want is someone who can afford the modification. If your income is too low to make the new monthly payments, why should they bother giving you a new mortgage? They want financial health and a dependable income. They don’t want to do this again in six months.

If you are facing foreclosure or bankruptcy and think a home loan modification would help restore your financial health, give me a call at 917-414-6795. Looking forward to hearing from you!

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