Using Lawyers Help in Loan Modification

How can lawyers help homeowners in the loan modification process? First off, it is important to know what loan modification is and when to avail of this service. Mortgage modifications are offered all over the country, including in Long Island, New York. A mortgage modification is more or less the same as a mortgage refinance in the sense that both are ways for the borrower to be able to afford his or her monthly payments. In a Long Island loan modification or alteration, the existing mortgage’s terms will simply be modified.

legal-proThe housing market, especially in Long Island, has shifted for the worse in today’s hard economic times. Plunging home values have rendered loan refinancing somewhat impossible. However, there are ways for a homeowner to save his or her home and avert foreclosure. To answer many homeowners who find themselves dealing with imminent foreclosure, the United States government has created various programs for these homeowners to save their homes. One of these programs is the Long Island loan modification and there are many qualified lawyers who can help homeowners in this complex process.

To qualify, a candidate for a loan modification must be in financial hardship, but must be able to come back to if the bank or lender grants the loan modification. Real estate attorneys adept at loan modification matters will help the borrower prepare the case and negotiate with the banker or the lender. The lawyer will examine closely the mortgage agreement and the prior mortgage process’s circumstances to determine if the lender has committed any usurious lending violations, in which the violations can be utilized to support the borrower’s appeal.

The first step for the borrower in going through the Long Island modification process is to first contact the lawyer who will guide the borrower in every step of the way. The attorney will sit down with the client and prepare a Hardship Letter, which is the first opportunity to explain to the bank or lender the borrower’s financial difficulty and his or her ability to pay modified monthly amortizations.

Next, the lawyer will help the client in getting and presenting the required financial documents including 2 months of pay stubs, 2 months’ worth of bank account statements, the client’s latest income tax return, and a home appraisal. In the Long Island loan modification processing, the lawyer will help in the preparation of a monthly budget (the client’s monthly expense and monthly income) to show that the client is having a significant change in his or her financial situation.

In qualifying for the loan modification program, one must be the owner of a 1 to 4 unit property. What is also important is the amount one owes on the mortgage as compared to the home’s value. One may be eligible for the loan modification program if the borrower’s home has a worth of at least 125 percent of the home’s outstanding balance.

Moreover, one’s taxes, insurance, mortgage, and any dues should be more than 31 percent of the client’s combined gross monthly income. These are needed for the borrower to qualify and the borrower should be in financial difficulty. If the borrower is qualified for the Long Island loan modification plan, the borrower is put into a trial modification for a few months to ensure that the borrower can tackle the new payment scheme. The time is also enough for the borrower to hand in the proper financial proofs and documents.

Another advantage of using a lawyer’s help is that bankers and lenders tend to respond to them more quickly and that they also grant those loan modification applications filed by lawyers. Thus, one is wise to get in touch with a lawyer to help with a loan modification.