A Loan Modification Attorney Provides an Overview of Loan Modifications
Applying for a modification to your mortgage loan can be a frustrating process. You may find yourself applying for a modification over and over again without any end in sight. If you are in foreclosure, a loan modification attorney may be able to help you save your home.
Loan Modification Types
A loan modification attorney should make sure you understand all of the types of modifications available to you. Modifications typically fall into one of two general categories.
- Federal and State Programs. The first types are sponsored by either the federal or state government. Programs such as the Home Affordable Modification Program (HAMP) are available to homeowners whose loans are owned by Freddie Mac or Fannie Mae. HAMP modifications are also available to homeowners whose loans are serviced by lenders that participate in the program. A loan modification attorney should walk you through the qualification process for these loans. For example, the HAMP modification program is available to most homeowners who have a monthly mortgage debt to income ratio of more than 31%.
- Private Modifications. Private loan modifications are offered by private lending institutions that already own your loan. These are offered at the discretion of your lender, and more than likely will not have a clear set of qualification criteria. It is important that your loan modification attorney work with your lender to understand how you might qualify before submitting any application.
A loan modification attorney may also be able to help you determine whether a non-modification alternative is available to you. Non-modification alternatives fall into three primary categories:
- Refinance Options. Refinancing your mortgage is the easiest way to lower your monthly payments. A refinance results in you having a brand new loan with a new interest rate and new monthly payment. Some people believe that they cannot refinance their home if they owe more than their property is worth. Federal programs such as the Home Affordable Refinance Program allow you to refinance your home even with negative equity.
- Repayment Plans. If you cannot refinance your home, a repayment plan might be available to you. A repayment plan allows you to repay any past due amounts on your loan over a set time period. This set time period is typically between 3 and 9 months. You will more than likely be required to resume making mortgage payments as well. This is a good option if you are concerned regarding the impacts of a foreclosure on your credit score.
- Forbearance. A forbearance results from your lender agreeing to allow you to reduce your mortgage payment for a set amount of time. The payments missed during the forbearance are typically added back to your loan. To qualify for a forbearance, you will most likely need to show your lender that you are experiencing a financial hardship.
Ready to Explore Your Options with a Loan Modification Attorney?
A loan modification attorney with Christopher M. Sprysenski, P.A. is available to assist you with understanding whether you might qualify for a modification to your loan. Contact us today at 407-630-8485.