Learn About Loan Modifications in Pembroke Pines, Florida
If you have recently been struggling to pay your monthly mortgage payment, it is important to know you are not alone. The thought of foreclosure is one that is likely to make you extremely stressed and anxious.
Being unable to afford your mortgage payments is not a result of your being financially irresponsible. In most instances, people start having trouble with their mortgage because they have recently lost their job or suffered a medical crisis.
It is critical to understand that even if you cannot make your current mortgage payments, it does not automatically mean you will lose your home. A loan modification can lower your monthly mortgage payments so they are easier for you to afford.
Unfortunately, not everyone qualifies for a loan modification. At Loan Lawyers, our Fort Lauderdale loan modification lawyer can guide you through the process and give you the best chance of success.
Our Pembroke Pines loan modification lawyers have helped thousands of people successfully avoid foreclosure on their homes, we can do the same for you. We will guide you through the process, and give you the best chance of success.
Call us now at (954) 523-4357 or contact us online to schedule a free review of your case.
What are Loan Modifications?
A loan modification refers to when certain terms of a loan are modified or changed.
Through a Pembroke Pines loan modification, you can reduce the interest rate on a loan, extend the payment terms, and even reduce the principal balance of the loan so there is less that you have to repay. Although any loan can be modified, the most common loan modifications apply to mortgages.
With an original mortgage, lenders place a lien on the property. Borrowers then make payments, usually on a monthly basis, until the entire mortgage loan is repaid. At this time, the lender releases the lien. If a property is sold before the mortgage is paid in full, the remaining amount on the loan must be paid to the lender, who will then release the lien.
Any change to the original mortgage is considered a modification.
What sets Loan Lawyers apart from other law firms and modification firms is the fact that we are not only counselors and advisors but battle-proven litigators and trial lawyers. By developing our reputation as fighters, and have taken over 200 foreclosure cases to trial, and have achieved tremendous results for our clients both 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 are able to get our clients the maximum benefit and recovery in their cases.
Loan Lawyers has successfully gotten over 2,000 loan modifications for our clients. Often clients come to us from other law firms or companies that were not able to get them loan modifications. We succeed where others fail based on our detailed knowledge of the laws pertaining to loan modifications. Most people aren’t aware or well versed in the detailed laws 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 is involved in the modification procedure if they don’t follow the law we will sue them and hold them accountable.
What Can Be Changed in a Loan Modification?
There are many terms of a mortgage that can be changed through a loan modification. Some of the most common of these include:
- Reducing the principal on the loan: You can reduce the total principal still owing on the home. To do this, you typically must liquidate assets or have a significant amount of funds you can use to pay a larger lump sum upfront. In exchange, the lender will reduce your principal to a much lower amount, which can also make your monthly payments more manageable.
- Reduced interest rate: If you have enough equity in your home and you qualify for an interest rate that is lower than what you are currently paying, you can reduce the interest rate, also lowering your monthly payments.
Extending the term of the loan: If you extend the term of your loan, you change the life of the loan so it is longer. By doing this, you can spread your payments over a longer period of time, essentially lowering your monthly mortgage payments. It is important to remember, though, that if you extend the term of your loan, you will pay more interest in the end. - Switch to a fixed rate from an adjustable rate: Encouraged by promotions and low initial rates, many people choose an adjustable rate mortgage when they first take out their loan. Over time, though, interest rates are bound to increase, which can make it much harder to afford the monthly mortgage payments. This can result in a lower interest rate, which will also lower your monthly mortgage payment. Another reason why people switch to a fixed rate from an adjustable one is that they know they will pay the same amount every month, better allowing them to plan for the future.
- Postpone your payments: You may be able to defer, or postpone, your mortgage payments if you or a family member has recently experienced a hardship. Generally speaking, the hardship must be a temporary one such as job loss, a temporary disability, or a medical emergency.
Drawbacks to Loan Modifications in Pembroke Pines
Although there are many benefits to Pembroke Pines loan modification, there are also certain drawbacks. These are as follows:
- Your credit score will be negatively impacted: Whether or not your credit score will take a hit after a loan modification depends largely on whether your lender will report it to the credit bureaus or not.
- Increased fees: Lenders typically charge a processing fee for loan modifications. While these fees are sometimes added to the monthly payment, this solution really counters the benefit of having reduced monthly payments.
- Higher taxes: Any time you discharge debt, whether it is through bankruptcy or a mortgage modification, the IRS considers it taxable income, which could increase the taxes you pay.
- Not all modifications are successful: While most lenders are required by law to let you apply for a modification, they have no legal duty to grant you one.
How to Apply for a Loan Modification in Pembroke Pines
Applying for a loan modification begins when you submit your application to your lender. You will need several pieces of documentation when submitting your application and they include:
- The loan application issued by your lender and that you have completed
- Bank statements
- Recent pay stubs
- Tax returns
- Bank statements
- A worksheet outlines your income and expenses
- An affidavit stating that you have fallen into financial hardship, along with an explanation of the hardship and how you will still be able to make payments if you obtain a modification
Again, lenders are not required to accept your loan modification application. Even if they do, you will still have to enter into certain negotiations with them. It is important to work with a Pembroke Pines loan modification attorney who can ensure your application is submitted properly and who can negotiate with your lender on your behalf.
Click to learn more about loan modification requirements.
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 loan modification. 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 an attorney or consulting firm to help you with loan modification if your bank is difficult to work with.
- Taxes. If your loan 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. Contact our Fort Lauderdale debt relief attorney for more information.
- Unsuccessful loan modification application. Even though the bank may be legally obligated to allow you to apply for a loan 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.
Can a Bank Foreclose During the Loan Modification Process?
A bank cannot foreclose on your home during the mortgage modification process. Once you default on your mortgage, typically by missing a monthly payment, you have a certain period 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 instead 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 get involved in harassment and abuse of 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 Pembroke Pines Lawyer for a Loan Modification?
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 an attorney, however, can be very beneficial in this process. Many people find the application process to be stressful. A Pembroke Pines 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 Pembroke 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 law governing loan modifications, for example, or violates other rights you have, an 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, an 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 Pembroke Pines Lawyer Help with Loan Modification?
Although the loan modification process is designed to be completed by the borrower without the need of 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 place of foreclosure.
- You are having trouble filling out the loan modification application. If you are having trouble understanding the loan modification application process or if your financial situation is especially complicated, an 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 laws governing loan modification applications or the laws governing foreclosure, an attorney can recognize the violation and help you to enforce your rights. For example, you have 120 days 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, an attorney can make sure your rights are enforced before things get to the point where you cannot recover your home.
- Your loan 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. An attorney may be able to point out facts or information in your favor that the bank or servicer overlooked in denying your application.
Do Not Hesitate to Call Our Pembroke Pines Loan Modification Attorneys Near You
If you are thinking about a loan modification, it is imperative that you speak to a Pembroke Pines loan modification attorney today.
At Loan Lawyers, our skilled attorneys can work with your lender on your behalf and give you the best chance of a positive outcome.
Call us now at (954) 523-4357 or connect with us online to schedule a free consultation and to learn more.
Reviews of Our Loan Modification Lawyers in Pembroke Pines, FL
⭐⭐⭐⭐⭐
By Michael Loudin, read more of our 309+ reviews on Google.
“Just wanted to say thank you to Ashton Rooks, Ruth Grauuw who done an awesome job in helping me save my home. If you need help with a home foreclosure please give Loan Lawyers a call. Thanks again Ashton and Ruth for all your help.”
