A loan modification is a great resource that helps homeowners get through a financial hardship and avoid foreclosure, but you may be wondering if a loan modification is a good idea for you and your situation.
Whether or not you should get a loan modification will depend on a number of factors, like who your lender is, if you can get approved, and how far along in the foreclosure process you are.
There are crucial times during the process that a homeowner should strongly consider getting a mortgage modification, especially if you are behind on payments and not yet been foreclosed on by your lender or bank.
At Denbeaux & Denbeaux Law, we are committed to helping homeowners through the loan modification process. We understand that a loan modification isn’t for everyone, but it’s still important to understand the benefits of getting a loan modification and how it might save your home from foreclosure. The easiest way to find out if a loan modification may be the best option for you is to contact us to talk about your situation and learn about your options.
How Does A Loan Modification Work?
A home loan modification allows you to modify the original loan that you owe to your mortgage lender. This could mean reducing the interest rate, splitting the payments into smaller amounts, or extending the loan to reduce payment amounts.
The loan modification process starts with homeowners pinpointing who their mortgage servicer is. Some mortgage servicers and lenders are the same company, but sometimes they use a separate company to service the mortgage loan. With foreclosure or the threat of foreclosure being a time sensitive issue, it’s important that you contact the right people and not waste any precious time.
After identifying the mortgage servicer, the homeowner will then submit an application seeking approval for a loan modification based on the homeowner’s financial hardship. This requires ample communication with your lender and the correct paperwork with proof of the financial hardship.
To get approved by your lender for a loan modification, you have to meet certain requirements. These requirements will vary from lender to lender, so making sure you know what your lender’s criteria is is crucial to getting approved. Otherwise, you will have wasted a lot of precious time for nothing.
One the homeowner is approved for a loan modification, the process moves into negotiating for the homeowner’s desired modification terms. We know that negotiating with a lender over a sensitive matter like your home can be intimidating, but don’t let that stop you from getting the terms that you need and deserve. A loan modification attorney may be able to help you negotiate with your lender and defend your homeowner rights to get the best outcome possible for your situation.
When Should You Get a Loan Modification?
Now that you have a better understanding of what a loan modification is and how to get one, you may be wondering when you should get a home loan modification.
Ideally, the sooner the better, but we understand that not everyone has the knowledge and resources to get a loan modification with their lender before it’s already too late. Here are some examples of times that homeowners should pursue a modification for their mortgage loan:
- When you know you’re going to miss a payment or you are already behind on your mortgage payments
- When you receive a Notice of Intent (NOI) to foreclose on your home from your mortgage lender
- When you’re facing an imminent default judgment
A default judgment is a judgment granted by a judge that allows your lender or servicer to take your home without giving you the option to fight against foreclosure. Default judgments can happen quickly when you don’t answer the initial Complaint or when something happens that may be preventing you from paying your mortgage on time. Examples could include:
- Losing your job
- Contracting an illness
- Death of a family
If you are facing a default judgment but haven’t received one yet, you still have an opportunity to pursue a loan modification for your mortgage and possibly save your home, but don’t wait until it’s too late. In some cases, you may even be able to apply for a loan modification up until your house is sold at auction. Speak with a loan modification attorney to learn more about when you should get a loan modification.
Talk to a Loan Modification Attorney Today
One of the best ways to figure out if a loan modification is a good idea for you is to talk with an experienced loan modification attorney. A modification lawyer can assess your current situation and help you decide the best course of action to take.
As a trusted New Jersey loan modification lawyer, Joshua Denbeaux may be able to offer you advice and resources to help you through the loan modification process. We want the process to be as stress-free as possible, which is why we offer a free initial consultation over the phone.
Call Joshua Denbeaux today to find out if a mortgage loan modification is right for you.