Understanding the Loan Modification Process

How does it work?

Loan modification is a method of foreclosure defense that involves working out new terms for an existing loan agreement. As a lender must agree to these new terms, it often takes a significant amount of time, perseverance, and dedication to obtain a loan modification. Our legal team can assist you in your pursuit of a loan modification by negotiating with your lender on your behalf. With an attorney's help, you may be able to significantly reduce the likelihood that your home will be foreclosed on.

There are several questions that you must ask yourself before you attempt to secure a loan modification with your lender. The answers to these questions will help you determine the strength and weaknesses of your negotiating position. They include:

• Do you currently owe more than the property is worth?
• Will you be able to afford the payments after the loan has been modified?
• Does the bank stand to make more money by simply foreclosing on the property?

An attorney from Price Law Group can help you answer these questions, and determine whether or not loan modification will be beneficial for you. If you decide to proceed with a modification, the firm will work diligently in an effort to secure a deal that is favorable to you.

Home Affordable Modification Program (HAMP)

The Home Affordable Modification Program (HAMP) is designed to help people with stable incomes facing foreclosure. Because of the current economic climate, the government is helping people keep their homes – even if they have fallen behind in their monthly mortgage payments. At the firm, we are ready to help you understand your financial situation and legal rights. To be eligible for HAMP, you must meet several requirements:

• You must live in your home as your primary residence
• You must owe less than $729,750 on your primary residence mortgage
• You must be in danger of losing your home because of financial hardship (either unable to make your payments or be in danger of falling behind)
• In the past 10 years, you must not have been convicted of felony larceny, theft, fraud, forgery, money laundering or tax evasion

Last year, HAMP help thousands of middle income families and homeowners keep their homes through mortgage modification. HAMP isn't for everyone, but it may be able to help you. According to news sources, hundreds of thousands of homeowners are participating in the program successfully. In 2011, the United States Department of the Treasury released statistics demonstrating that 77.8% of HAMP participants were already in default when they entered the program; 22.2% were at risk of defaulting.

If you are at risk of losing your home, an attorney from Price Law Group may be able to help you get a loan modification. By lowering your monthly mortgage payments over a longer period of time, a loan modification may be the solution to your foreclosure defense problem. Last year, more than 35,000 homeowners participated in HAMP in California alone. If you have questions about foreclosure, bankruptcy or loan modification, contact an attorney from the Price Law group today – we're here to answer your questions.

Don't be a Victim: Mortgage Modification Scams

If you are in the middle of a financial crisis and may face a foreclosure, watch out for loan modification scams. Scammers attempt to take advantage of desperate homeowners by promising to "save their homes" for a fee. If a company offers to save your home from foreclosure in exchange for money, be extremely cautious. Companies cannot guarantee the financial security of your house. Often, these types of scams will demand that you pay up front – before they actually delivery the promised services. If a company or financial "counselor" tells you to pay them before they actually produce the product you are buying, they are probably trying to scam you.

According to the Federal Trade Commission (FTC), loan modification scams – also called "foreclosure rescue scams" – may try to convince you to avoid your lender. Failing to communicate with your lender isn't helpful, it creates more problems. If you cannot make your mortgage payment each month, contact your lender and see if they are willing to negotiate a new payment plan. Your lender does not want your home to foreclose; foreclosure costs your lender money. You lender will probably be willing to work with you to avoid foreclosure.

If a financial counselor of company offers to take ownership of your house and rent it back to you, do not trust them. Sometimes, scammers convince homeowners to transfer the ownership of their homes to a company, promising to rent the house back to the homeowner. Once a homeowner signs their home over to the company, the company is not obligated to rent it back to them. Instead, they will probably evict the homeowner. Even if you sign homeownership to a third party company, you are still responsible to pay off your mortgage.

Negotiating Mortgage Modifications

As the nation's economy continues to struggle, many major lenders are becoming increasingly open to the idea of loan modification. There is a strong chance that your lender will be willing to discuss such an arrangement with you. However, it is important to note that dealing with lenders such as Bank of America, JP Morgan Chase, or Wells Fargo can be extremely overwhelming. It is best to seek the help of an attorney who can negotiate with your lender on your behalf.