Loan Modifications


Lenders and servicers are generally concerned with one thing when considering the approval of a loan modification: "Your Hardship".  Fortunately, the one thing they are most concerned about is insuring you can afford the terms of the modified loan. If you cannot afford the new terms they would be doing themselves and you a great disservice. 

Keep in mind two things: 1. that a loan modification erases your legal rights to sue your lender if they violated the law, and 2. contrary to  what you may hear, obtaining a modification can take a long time and are difficult to process.

So why are loan modifications so difficult to process?  Consider this: if you make too much why would the bank want to improve the terms of the loan in your favor? Moreover, if you make too little why would the bank want to give you any terms at all?  If you spend money on items they believe is frivilous, would they trust you to resume and continue to make payments on time?

Each lender maintains different guidelines for approving loan modifications but the most important things you can do to qualify is maintain documentable proof of a hardship, be able to make payments on modified terms, and live within in your means.

For loan modification purposes, you can qualify based on your total household income.  This method of calculating income is definitely in your favor. This means you can count income from many sources including a spouse’s income that was not on the original loan, social security income, income from a home business and income from a second job as long as it can be documented.  By do not speculate.

This means you will need to show bank statements, 1099’s or some other form to provide the lender (of course, this must be a part of a detailed and reviewed budget audit).

To see if you may qualify try calculating your mortgage balance at a 6.00% fixed interest rate for 30 years. Can you afford this payment? If so you may qualify for a loan modification.

WARNING: this is only for a general qualifying exercise only; do not expect this rate or payment!  If the payment at 6.00% is just too high, then you may not be an appropriate candidate for a modification.  In addition, this quick qualification does not take in to account the possibility of a principle reduction or interest rates that may be obtainable at less than 6.00%. More importantly, making the decisions on what information to include in your modification request has legal consequences.  IBefore you do anything, ask for a Free consult with Dever Legal Services.

Contact Us Today: Avoid Foreclosure

If you are having difficulty paying your mortgage payments, you might be interested in exploring options like a loan modification or foreclosure defense. To discuss the process and whether this is the best option for your circumstance, you should speak with an attorney. Contact a lawyer at Dever Legal Services by e-mail or by calling 877-464-5297.


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