Fort Lauderdale Loan Modification Lawyer

What is a Loan Modification?

Loan modification is a process where the mortgage terms are modified outside the original contract terms agreed to by the lender and borrower (i.e., mortgagee and mortgagor in mortgage states; Trustee and Trustor in Trust Deed states). Generally, any loan can be modified, and the process is referred to as loan modification or debt rescheduling.

In Fort Lauderdale, the progression of a mortgage establishes that payments are made according to the loan documents until the mortgage is paid in full (or paid off). The lender holds a lien on the property, and if the borrower sells the property before the mortgage is paid off, the unpaid balance is paid to the lender to release the lien. Any change to the mortgage terms is a modification. Changes may include a reduction of the yield (commonly referred to as the interest rate), an extension of the payment term (ex. extending 30 years to 40 years), or a reduction of the principal balance of the loan. (Wikipedia)

What sets Loan Lawyers apart from other law firms and loan modification firms is that we are not only counselors and advisors but battle-proven litigators and trial lawyers. By developing our reputation as fighters, we have taken over 200 foreclosure cases to trial and have achieved tremendous results for our clients at trial and in settlement negotiations. We always aggressively fight for our client’s rights and are willing to go to trial if we have to. Therefore, we can get our clients the maximum loan modification benefit and recovery in their cases.

Loan Lawyers has successfully gotten over 2,000 loan modifications for our clients in Fort Lauderdale. Often clients come to us from other law firms or companies that could not get them loan modifications. We succeed where others fail based on our detailed knowledge of the laws about loan modifications. Most people need to be made aware and well-versed in the complex rules of RESPA (The Real Estate Settlement Procedures Act), a Federal Statute that details specific procedures and laws that banks and loan servicers must adhere to when processing loan modifications. Banks and Loan Servicers know that when Loan Lawyers are involved in the loan modification procedure, we will sue them and hold them accountable if they don’t follow the law.

What are the Options for Loan Modifications in Fort Lauderdale, Florida?

Any homeowner who needs to lower their monthly mortgage payments could have multiple options for a loan modification. Some common options may include:

Principal reduction. If you have cash or other liquid assets available, you can reduce your mortgage payments by lowering the principal left on your loan. By paying off a significant amount of the principal on your mortgage, you can renegotiate a much lower monthly payment for the remainder of the term of your mortgage.

Lower interest rates. Qualify for a lower interest rate and have sufficient equity in your home. You can refinance your mortgage at a lower interest rate, reducing your monthly payments to a more manageable level.

Extended loan terms. You may be able to negotiate to extend the time of your loan. By extending the time of the loan, you can reduce your monthly payments by spreading out the outstanding balance over a longer period. However, by extending the loan term, you will pay more in interest.

Changing from adjustable to fixed rates. Many people apply for adjustable-rate mortgages, enticed by the low teaser rates and payments. Once the interest rate begins increasing, however, they often need help to afford the higher monthly payments. It may be possible to reduce monthly costs to a lower, more manageable amount by converting or refinancing your mortgage from an adjustable to a fixed-rate mortgage. This also has the benefit of allowing you to plan for the long term secure in the knowledge that your mortgage payment will not vary or gradually increase over the years.

Postponement of payments. If you or a family member are experiencing a temporary hardship – such as losing your job, being temporarily disabled, suffering a medical emergency, or being called to military duty – you may be able to negotiate a temporary postponement or deferment of your mortgage payments. While this will allow you to stabilize your financial situation, bear in mind that postponing payments does not delay the interest. You will continue to accrue interest on the principal during your postponement, and this, in turn, will increase your monthly payments once the postponement period ends.

What Is a Loan Modification and How Does It Work?

A loan modification is a permanent restructuring of your mortgage payment or other long-term loan by changing one or more terms of the loan.

A loan modification may involve a reduction of the loan principal, a reduction of the interest rate, changing the interest rate from an adjustable rate to a fixed rate, or extending the term of the loan. Generally, a borrower can only seek a loan modification once they begin experiencing financial hardship and difficulties meeting their monthly payments.

A borrower obtains a loan modification by applying to their bank or the bank’s loan servicer. In the application, the borrower first states that they are unable to afford the current monthly payments due to some financial or personal hardship.

Cons of Mortgage Modifications in Florida

Although obtaining a loan modification may be your only option for bringing your mortgage payments under control and stabilizing your financial situation, you should be aware that there are disadvantages to obtaining a mortgage modification in Fort Lauderdale. These include:

Negative impact on credit score. Although loan modification may have no impact on your credit report or credit score, it can have a negative impact, depending on how your bank chooses to report the loan modification to the credit bureaus.
Loan processing costs and legal fees. Banks will usually charge processing fees in connection with a loan modification application. The bank may be willing to add these fees to the loan principal, but doing so will partially negate the reduction in monthly payments. You may also have outstanding late fees, which can also be added to the principal of the modified loan. You may also need to hire a loan modification attorney or consulting firm to help you if your bank is difficult to work with.
Taxes. If your mortagage modification involves a discharge of debt, you may be liable to pay income tax on the forgiven debt, although federal law makes most discharged mortgage debt non-taxable at the federal level.
Unsuccessful loan modification application. Even though the bank may be legally obligated to allow you to apply for a mortgage modification, it is not required to grant you a modification. If the bank is unconvinced that you would be able to afford any modified loan, it may instead encourage you to simply sell the property or initiate foreclosure proceedings as soon as it is legally entitled to do so.

The process to Apply for Loan Modification in Florida

If you choose to seek a mortgage modification, the process generally begins with you contacting the loss mitigation department at your bank or the bank’s loan servicer. Contact information for this department can usually be found on your monthly mortgage statement, or on the bank’s or servicer’s website.

You will need to apply for a mortgage modification. A loan modification application usually requires information such as:

A complete loan application form issued by the bank or servicer, which will usually ask for your personal information, loan information, property information, etc.
Recent pay stubs or a profit and loss statement, if self-employed
Bank statements
Tax returns
An income/expense worksheet
An affidavit or statement of hardship, explaining how you have suffered a financial or personal hardship, but will be able to make modified payments

Click to know if you qualify for loan modification.

Can a Bank Foreclose During the Loan Modification Process?

In Fort Lauderdale, a bank cannot foreclose on your home during the loan modification process. Once you default on your mortgage, typically by missing a monthly payment, you have a certain period of time during which the bank cannot initiate foreclosure proceedings. This time allows you to cure the default or seek alternatives to foreclosure, such as the sale of the home, a deed in lieu of foreclosure, or a loan modification.

Once you have submitted a loan modification application, the bank cannot initiate or pursue a foreclosure action until it has denied your application. Unfortunately, there are often situations where banks or loan servicers violate the laws designed to protect homeowners during the loan modification application process.

A bank or servicer may try to pursue a loan modification and a foreclosure at the same time or engage in deceptive or misleading tactics, such as leading a homeowner to believe their loan modification has been approved when it has not. This in turn would lead to the homeowner sitting on other rights or options they might have, such as an appeal of their application denial, or a short sale or deed in lieu of foreclosure.

A violation of your rights by a bank or servicer during the loan modification process may be grounds to stop a subsequent foreclosure proceeding. For example, if a bank or servicer pursues foreclosure while considering a loan modification application, that may be evidence that the bank or servicer failed to consider the application in good faith, having already decided to pursue foreclosure.

Do You Need a Loan Modification Lawyer in Ft. Lauderdale?

In many cases, the bank will approve or deny you for a loan modification based on the formulas it uses, along with the financial information you submit with your application. In almost all cases, you should avoid hiring a loan modification company, which only acts as a middleman, charging you simply to get your financial information, fill out your application, and submit it. After that, you are left to fend for yourself.

Hiring a loan modification attorney, however, can be very beneficial in this process. Many people find the application process to be stressful. A Fort Lauderdale loan modification lawyer can help you organize your information and complete your application, then speak with the bank or servicer on your behalf.

Having a Fort Lauderdale loan modification attorney represent you during the loan modification application process means that you have someone protecting your rights. If the bank or servicer violates the Fort Lauderdale law governing loan modifications. For example, or violates other rights you have, a loan modification attorney can point out these violations to the bank or servicer and try to get your application approved.

If your application is still denied, and the bank or servicer commences legal action against you, a loan modification attorney can assert the bank’s or servicer’s unlawful conduct as an affirmative defense or counterclaim to their legal efforts to collect on the debt.

How Can a Fort Lauderdale Lawyer Help with Loan Modification?

Although the loan modification process is designed to be completed by the borrower without the need for legal assistance, there are many circumstances in which a lawyer can help with loan modification:

You aren’t sure whether you should pursue a loan modification. If you have fallen behind on your monthly payments, but aren’t sure if a loan modification is the best option for you, a lawyer can help you understand your legal rights and your choices for resolving your debt, and advise you as to the best course of action for your particular situation. A loan modification lawyer can also recognize more favorable options than a loan modification, such as fighting foreclosure in court or pursuing a short sale or deed in lieu of foreclosure.
You are having trouble filling out the mortgage modification application. If you are having trouble understanding the loan modification application process or if your financial situation is especially complicated, a loan modification attorney can help you fill out the application paperwork and assist you with presenting your best case for a loan modification.
Your bank or its loan servicer violates the law. If your bank or its loan servicer violates the Florida laws governing loan modification applications or the laws governing foreclosure, an attorney can recognize the violation and help you enforce your rights. For example, you have a 120-day period following default before the bank can start foreclosure proceedings, and the bank cannot initiate a foreclosure while you have a pending loan modification application. Since it is extremely difficult to recover your home after a foreclosure is completed, a loan modification attorney can make sure your rights are enforced before things get to the point where you cannot recover your home.
Your mortgage modification application is denied and you want to appeal. You will generally have the opportunity to appeal the decision if the bank or the loan servicer denies your application. A loan modification attorney may be able to point out facts or information in your favor that the bank or servicer overlooked in denying your application.

Talk to a Fort Lauderdale Loan Modification Lawyer Now

If you are having trouble making your monthly mortgage payments, you don’t have to let the bank foreclose and take your house. Here in Fort Lauderdale, you have other options.

Contact Loan Lawyers today to schedule a free consultation with one of our Fort Lauderdale loan modification lawyers to learn more about your rights and your options for a mortgage modification, as well as many other programs that might resolve your mortgage issues.

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