A lawyer who is an experienced negotiator, familiar with the financial concerns, laws, and regulatory requirements facing both borrowers and lenders, and familiar with foreclosure practice, can be both an effective counselor to and advocate for a borrower when dealing with a lender.
State and Federal laws affecting mortgage modification and mortgage foreclosure are likely to change frequently during these troubled times. A legal professional will be aware of these changes, how they affect a borrower’s particular situation, and how they can best be used to a borrower’s advantage.
A lawyer will be aware of and understand a variety of courses of action which may be available to a borrower facing financial difficulties, including Chapter 7 and Chapter 13 bankruptcy, and can advise a borrower on the benefits and drawbacks of such options.
An attorney experienced in foreclosure litigation will be able to zealously defend a borrower facing a mortgage foreclosure, and will use his or her best efforts to get the most favorable result possible for the borrower.
A lender will often be represented by an experienced attorney or other professional who is familiar with the financial and legal issues involved in mortgage modification and foreclosure. How long does a mortgage modification take? Generally, a modification takes anywhere from 30 to 90 days to complete. What might a modification achieve? There are many possibilities and any one or combination may occur. Some of these are: Lower interest rates for the remainder of the mortgage Lower or even a 0% interest rate until a set date A payment holiday until a set date Arrears added to the balance so as to bring your account up to date and help your credit Fees and charges forgiven Nothing Lowering of monthly payments by lengthening to term of the loan even up to 40 years Can I use my own attorney? Absolutely, you can use any attorney. Ask your attorney if he/she is a member of the DIYLoanModificationService program, if not then you can ask us to offer your attorney membership and, if successful achieve a substantial discount for you. Can I attempt a DIY modification and then use a law firm if I didn’t get a good enough offer? Absolutely, a lawyer may be able to see why your attempt failed and correct that error. It is important that you document all correspondence with your lender during your DIY modification in case you later decide to take the law firm approach. DIYLoanModificationService legal fee discounts still apply but it may take the lawyer more time to act on your case because the history has to be examined. When you receive your DIYLoanModificationService pack it includes a diary where you should document all correspondence. This makes it easy for you to keep track of your DIY modification and much easier to hand the case over to a law firm should you choose to do so in the future. Will a loan modification application damage my credit? No, unlike a bankruptcy or foreclosure, a mortgage modification, or attempt to do so, will not appear on your credit at all. Making late payments on your mortgage does damage your credit. It is very common for a successful modification to remove any arrears from your account and add them to the amount outstanding on the mortgage. This brings your payments up to date and has a positive effect on your credit score. Will I qualify? For there to be a possibility of qualifying for a mortgage modification you must have a verifiable hardship. You must document your current or future inability to pay your mortgage under its current terms. It is equally important that you prove that you can pay, or will be able to pay, a more manageable payment. Your lender will not see the point in modifying your loan from something that you cannot afford to something else that you cannot afford either. Your dept to income ratio need to become within your lenders target range once your mortgage is modified. Our guide shows you how this crucial portion is done. What qualifies as a hardship?
Any event that has either reduced your income or increased your outgoings may qualify as a financial hardship. This could be a job loss, struggling business, illness, divorce or simply the fact that your interest rate has adjusted resulting in unmanageable payments. There is no shame in not being able to afford your mortgage after the teaser rate period is over. Lenders know that many people were told that they could simply refinance to a lower rate before the introductory teaser rate adjusted upwards. Do I have to be late on my payments before I qualify for a loan modification?
No. A lender would prefer for you not to get behind on your payments. They will look at you in a positive light if you are pro-active and tackle a problem that you can see coming. For example, if you know that your payment will adjust in four months time to a rate that there is no way you can afford then you should act now to modify your loan. Getting behind on your payments will only damage your credit. I called my lender and they told me that they do not do mortgage modifications. What are my options? Chances are that you called the service number on your statement or you have spoken with an employee from the collections department. It is not the job of these people to talk to you about loan modifications. You normally need to speak to the loss mitigation department; it is their job to prevent your home from going into a foreclosure that causes the lender to lose money. They would rather lose less money by modifying your mortgage. Can I be taxed for debt forgiven as a result of a mortgage modification, short sale or foreclosure? Yes, you can and without the correct knowledge you almost certainly will be. If your principal is reduced by $100,000 or your house short sells for $100,000 less than you owe then you can be taxed on the $100,000 as if it was regular income. Our guide gives you the information that you need to legally not be liable for debt forgiveness tax via 1099-C. | 
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