How do I get a Loan Modification when I am in Foreclosure?
This question, as well as a few other related questions, are the most common things potential clients ask in a foreclosure consultation. There are instances in which the bank bringing the foreclosure lawsuit against you may be willing to modify your mortgage and enter into a new, but modified, mortgage payment under the HAMP loan modification program. These are not without consequence – you may see significant charges put to the back-end of your newly modified mortgage. I advise many home owners that it is best to seek out, and hopefully secure, a loan modification before too much time progresses in your foreclosure lawsuit. If you are facing foreclosure, a loan modification is one of the few options that may allow you to keep your home.
How do I know if I am eligible under HAMP?
A homeowner may be eligible under HAMP if they meet the following criteria:
- You obtained your mortgage on or before January 1, 2009.
- You owe up to $729,750 on your primary residence or single unit rental property.
- You owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property.
- The property has not been condemned.
- You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (non-owner occupants must be delinquent in order to qualify).
- You have sufficient, documented income to support a modified payment.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
Again, these are general requirements. They can vary based on what your lender requires. FHA loans, as well as VA loans, have their own HAMP loan modifications that they can apply for. Again, the requirements will vary by lender.
Do I get a principal reduction in a HAMP loan modification?
This is probably the biggest misconception about loan modifications. Principal reductions are quite rare. It is when the bank essentially rewrites the amount you borrowed when you financed your home. It is essentially hitting the loan modification lotto and they are the exception to the rule. There are only a hand full of principal reductions that my office receives in a year – and these come down to my office without asking for it.
I want to try to modify my loan, what do I do next?
There are two ways to go about applying for a loan modification with my firm. That’s right – I said firm. I have a whole loss mitigation team at my disposal that dedicates their time to applying for loan modifications. If you have not yet been served with a foreclosure lawsuit, you can hire me specifically to apply for a loan modification on your behalf. We charge an initial fee and then a small monthly fee to do this. If you are involved in a foreclosure lawsuit and have retained me to defend you in that action, applying for a loan modification is included in that representation.
If you want to set up a consultation to discuss your loan modification application we can do so for a small consultation fee. If you have been served in a foreclosure lawsuit within the last 20 days, this consultation will be free.
So go ahead, call me to set up an appointment at 813-502-6768 or e-mail me to set up your consultation!
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