Defaulting on mortgage payments due to unexpected financial challenges is a common issue among many homeowners. If your job fails and you struggle to keep up with your payments, your house can be foreclosed in just 90 days. If you feel like you are on the brink of falling into this path, you might want to consider a mortgage modification to avert foreclosure.
What is mortgage modification?
Unlike refinancingwhere you necessarily have to go through similar processes as when you first purchased your home, mortgage modification allows you to renew your loan terms without pulling your credit score, or asking you to pay for underwriting and other mortgage processing fees.
Its primary purpose is to provide relief to distressed borrowers by amending the original terms of the loan so that the resulting new payments would be more affordable to the homeowner. This change will be deemed permanent and will remain so throughout the life of the loan.
Your lender is not obligated to give you a mortgage modification. Some may grant you a modification; others may not. But most lenders will assess your situation and will try to negotiate just to not lose the business.
How do I initiate talk about mortgage modification?
The hardship department of your lender deals with mortgage modifications. If you start to have trouble with paying your mortgages because you lost your job or a spouse made an important career change, contacting the hardship department to talk about a modification should be your first move.
Do I need to lawyer for a mortgage modification?
Yes, and no, depending on your needs. Typically, mortgage modifications can run up to 3 months to process. If you want your mortgage modification to be faster, a legal representation could prompt your lender to take action. A lawyer deals with your lender and handles the process related to the modification on your behalf, especially when you don’t have the time to deal with them yourself.
However, hiring a legal representative is not expensive. And if you already are hard on money, it might add up to your already problematic budgeting. Weigh out the cost and make sure you have your priorities evaluated before settling on a decision to hire a lawyer.
How do I choose a good lawyer?
It is important that your legal representation has a wealth of background about what he or she is representing. Do not just pick any lawyer. See to it that the one you hire is experienced in dealing with your current situation. Hire someone who has done representations on modifications before, and know if they had been successful in the endeavor. If you’re just going to spend money for this purpose, you should be able to get your money’s worth and a higher probability of success with the right representative.
Mortgage modification can save you thousands of dollars on lowered interest rates. If you worry about not being able to carry the burden of your home loan any longer, a negotiation is your best resort to never fall into default. Talk to your lender about it.