If you’re struggling to keep up with your mortgage payments, a loan modification may help make your loan more affordable and allow you to avoid foreclosure. However, the loan modification process is often far more complicated than homeowners expect.
Mortgage servicers are required by law to follow strict loan modification rules and regulations, but, unfortunately, servicers take advantage of the fact that most homeowners aren’t aware of these loan modification rules. It’s not uncommon for predatory lenders to violate these rules outright or make critical mistakes that lead to wrongful foreclosure. Working with a loan modification attorney helps level the playing field for homeowners.
In this article, we’ll discuss ways mortgage lenders and servicers often take advantage of innocent homeowners, how a lawyer can help you during the loan modification process, and the key questions to ask to make sure you’re working with the right loan modification attorney.
At Denbeaux & Denbeaux Law, we are committed to helping homeowners avoid and fight foreclosure. Experienced loan modification attorney Josh Denbeaux may be able to assist you through the loan modification process from application through negotiation and beyond. If you are looking for loan modification help, contact us today to learn more about how Denbeaux Law may be able to help you.
Loan Modification Attorneys Know What to Look Out For
Mortgage companies have a lot more experience with loan modifications than the average person and often use that experience to take advantage of uninformed or inexperienced homeowners. When you decide to go it alone for your loan modification, you may not know what to watch for, which could result in foreclosure.
One way mortgage companies take advantage of homeowners is by telling a homeowner they are getting a loan modification but then continuing to move forward with foreclosure. Under the law, mortgage companies are required to pause the foreclosure process while a loan modification application is being reviewed for first applications. Moving forward with foreclosure during a loan modification review is an illegal process called dual tracking, and is just one way mortgage companies take advantage of borrowers who aren’t aware of the laws around foreclosure and loan modifications.
A loan modification attorney is aware of the foreclosure guidelines and laws that protect homeowners. They are also aware of other common mistakes and violations that occur throughout the foreclosure process, such as servicers claiming they never received certain documents or denying a loan modification without proper review, which could be used to protect homeowners against foreclosure.
Loan modification attorneys can also force mortgage companies to adjourn sales, extend rights of redemption and otherwise slow down or stop foreclosures so that a modification application can be reviewed.
Predatory lenders often take advantage of homeowners who are not aware of the laws and protections that apply during foreclosure. Having an attorney on your side can help protect you from violations or mistakes that could lead to wrongful foreclosure. An attorney can also help in other ways that improve the loan modification process, even when no violations have occurred.
Predatory loan modification companies also take advantage of homeowners by illegally taking money in advance to modify loans. Some actually submit paperwork, but they cannot do anything for a homeowner when the mortgage company improperly denies relief or refuses to review the application.
These companies are violating federal law, known as the Mortgage Adjustment Relief Services (MARS) Rule. I recommend avoiding companies that are not litigation attorneys licensed in your state.
What A Loan Modification Attorney Can Do For You
An attorney can help in a variety of ways throughout the loan modification process. Below are some of the most common ways an attorney can help:
Prepare Your Loan Modification Application
A loan mod attorney can help you complete your loan modification application correctly and make sure all of the required documents are included. Missing or incorrect information is one of the most common reasons loan modification applications are denied, and an attorney can help make sure you avoid those mistakes.
Competent mortgage modification attorneys also know the guidelines for your mortgage investor and mortgage servicer, and know when the mortgage companies have violated those guidelines – and the law – when improperly reviewing modification applications.
Illegally acting multi-state mortgage modification companies cannot enforce the applicable guidelines and compel modification. They just submit paperwork and move along to their next victim.
Communicate & Negotiate With Your Lender
A mortgage servicer may be more willing to negotiate with you if you are working with an attorney. A loan modification lawyer can communicate with your lender on your behalf and negotiate better terms and conditions for your loan modification. A lawyer can also review your loan modification contract and advise you on any terms or conditions that might be harmful to you.
A litigation mortgage modification attorney, licensed in your state, can also sue the mortgage company to comply with their own guidelines and the law. This is a complex area of the law that requires expert attention.
Identify Servicing Errors & Violations
One of the main benefits of working with a loan modification attorney is that you can use their knowledge and experience to identify errors or violations that you might not have caught on your own.
The attorney’s job is also to enforce your rights when the mortgage company makes mistakes. And, unfortunately, mortgage companies make many mistakes that hurt homeowners.
Help If Your Application Is Denied
Homeowners also run the risk of being denied a loan modification. Lenders tend to want to work with homeowners to avoid the foreclosure process. However, they can still deny your application if you don’t have the proper paperwork or don’t meet the servicer’s qualifications. If you are denied a loan modification, a loan modification lawyer may be able to work with you to appeal the denial, fix the application, and reapply or find an alternative solution to make sure you’ve explored all potential options for your specific situation.
Unfortunately, I have often seen mortgage servicing companies denying modification applications that are complete and meet all their internal guidelines. These are considered fraudulent denials, and a litigation mortgage attorney can turn fraudulent denials into lawsuits that compel modification and can award damages and attorneys’ fees.
To avoid fraudulent activity, it is best to stay away from multi-state non-litigation attorney modification companies and instead work with a licensed attorney in your state.
Contact a Lawyer for Loan Modification
Ultimately, there are a number of reasons why you should consider hiring a loan modification attorney. Before applying for a loan modification, you should make sure that you’re protected and prepared. Working with an experienced attorney may be the best way to prepare for any loan modification proceedings.
Joshua Denbeaux is an experienced loan modification attorney who has been fighting for homeowners in New Jersey for over 15 years. Contact us today to schedule a free consultation to learn more about how he may be able to help you.
