Long Island Loan Modification Lawyer
Are you behind on your mortgage payments? Has your mortgage company threatened to file a foreclosure action or have you been served with a foreclosure lawsuit? If you are struggling to pay your mortgage payments, you may be searching for ways to prevent foreclosure and keep your home. A loan modification can be an alternative to foreclosure. By modifying your mortgage loan, you may be able to change the terms of your mortgage so that you can keep your home.
The Law Offices of Adam C. Gomerman is a federally designated debt relief agency on Long Island that specializes in providing several services to consumers. While bankruptcy and debt consolidation are viable alternatives in many situations, there may be a better way to handle some large, secured debts, such as mortgages. One of the services offered by Adam C. Gomerman is expert loan modification. This system has been in use for several decades, but it was a rare achievement to have it done successfully before the housing crisis of 2007 and the global recession that followed. If you are a Long Island resident, or live near our Huntington, NY office, contact us today to schedule a free loan modification consultation with our attorney, Adam C. Gomerman.
Our Long Island loan modification lawyers can help you apply for a loan modification and negotiate the terms of the modification so that you can afford to keep your home. Contact The Law Offices of Adam C. Gomerman by calling (631) 549-1111 to discuss your options for keeping your home with a loan modification. With offices in Huntington, NY, our convenient Long Island location makes it easy to work one-on-one with our loan modification team.
What is a Loan Modification?
A loan modification changes the terms of your original loan agreement and mortgage. Modifications are typically used when a homeowner cannot afford to continue making the mortgage payments and is in danger of losing the home. Once the lender approves the modification of your mortgage loan, the new loan terms become permanent for the remaining term of the loan.
Modification of existing mortgage loans can be extremely useful for homeowners who are facing foreclosure because of a financial hardship. The modification is especially beneficial for homeowners who owe a substantial amount in past due mortgage payments that they are unable to catch up in one lump sum.
Loan Modification Benefits for Long Island Homeowners
There are numerous benefits of modifying a mortgage. Of course, the most important benefit may be the fact that you can save your Long Island home from being sold at a foreclosure sale. However, several other benefits of a loan modification can help you in the long-term as you continue to recover from your financial crisis. Some benefits of obtaining a modification of your mortgage terms include:
· Reduction of the interest rate on your loan;
· Lower monthly mortgage payments;
· Converting a variable interest rate into a fixed interest rate;
· Waiver of fees, including late payment fees and missed payment fees;
· Extend the terms of the loan; and,
· Reduction of the principal amount owed on the loan.
You may or may not receive each of these benefits in a modification agreement. The terms of your modification will depend on numerous factors, including your specific financial circumstances, the value of your home, and the lender. However, our staff of legal professionals has experience negotiating favorable terms for loan modifications through the Flex Modification program and through private lenders.
In many cases, the benefits of a loan modification outweigh the potential drawbacks of a modification. For example, debt forgiveness can be taxable if the lender reduces the principal amount of the loan. However, when you weigh this drawback against the numerous benefits of modifying your mortgage, including saving your Long Island home, it is a small price to pay for a successful modification agreement.
How Does a Loan Modification Work for Residents of Long Island?
You must submit a loan modification package to your lender that complies with the terms set by your lender for modification applications. The package contains a variety of financial information, including copies of tax returns, bank statements, pay advices, and a letter of explanation of your financial hardship. Once the lender receives your package, it must evaluate the information to determine if it will approve your request to modify your mortgage loan.
Each lender uses a set of criteria to determine if a modification of your current mortgage is warranted. We discuss some of those factors below. However, the decision usually comes down to a solid business choice of whether the modification is more beneficial to the lender than a foreclosure action.
In many cases, a well-drafted loan modification package can tip the scales in your favor if the decision is close. Therefore, working with a Long Island loan modification attorney can increase the chance your application may be approved, especially if the criteria does not weigh heavily for approval or denial.
Home Affordable Modification Plan (HAMP)
The Home Affordable Modification Plan (HAMP) was a program within the Making Homes Affordable (MHA) Program. The MHA encompasses a variety of programs that can help homeowners who are facing foreclosure. Through these programs, homeowners who cannot make their mortgage payments because of unemployment may qualify for a loan modification, refinance, or temporary forbearance.
HAMP was the largest program used by homeowners under MHA to save their homes from foreclosure. However, HAMP was phased out in 2016 and is no longer available. Even though HAMP is no longer an active program for new modifications, you may still contact your mortgage company directly about modifying your existing loan to prevent foreclosure.
Furthermore, if you have a Fannie Mae mortgage, you may qualify for a loan modification under the Flex Modification Program, which incorporated most of the terms of HAMP but expanded some of the criteria to allow more homeowners to qualify for a modification to save their home. You can determine if Fannie Mae owns your mortgage by using its Lookup Tool online.
How to Qualify for a Loan Modification?
Live on Long Island? Learn how to qualify for a loan modification with our help.. We’re conveniently located in Huntington, NY, within easy access of all major Long Island parkways.
Each lender has a set of criteria that it uses to determine if a homeowner is eligible for its loan modification program. Some of the factors a mortgage company may use when reviewing a modification application for a privately backed mortgage include:
· Whether the home is your primary residence — Most mortgage companies only offer loan modifications for a primary residence.
· What is the condition of the property? If the property is in the process of being condemned or in a condition that is considered unlivable, the company is less likely to approve a loan modification.
· The net present value of the home. The mortgage company analyzes the net present value of the home with the modification and without the modification. If the net present value with the modification will be higher, the company is more likely to approve the modification.
· Whether your mortgage has been modified in the past. Lenders are not likely to restructure or modify a mortgage more than once.
· Other relevant factors set by the specific lender.
If Fannie Mae or Freddie Mac owns your loan, mortgage companies must follow the guidelines for the Flex Modification Program when determining whether a homeowner qualifies for a loan modification. The requirements for a modification under the Flex Modification Program include:
· Freddie Mac or Fannie Mae must own the loan. VA, USDA, and FHA loans do not qualify.
· The loan must have originated at least one year or more before your request to modify your loan.
· Only first mortgages qualify for the Flex Modification Program.
· Before requesting a loan modification, your mortgage payments must be at least 60 days in arrears.
· You cannot qualify for a modification if you have had three or more prior modifications to your loan.
Determining if you qualify to modify a loan backed by a private lender or a loan owned by Fannie Mae or Freddie Mac can be difficult. Our Long Island loan modification lawyer has experience dealing with various lenders, including putting together modification packages that can help increase the chance your loan modification application is approved.
Loan Modification vs. Refinance
A modification is not a refinance of an existing mortgage. As discussed above, a modification of your loan allows you to change the terms of your loan to make it more affordable to keep your home. However, a refinance does not change the terms of your current mortgage. With a refinance, you are applying for and obtaining a new mortgage with your current lender or another lender. When you close on the new mortgage, the proceeds of the refinance are used to pay off the current mortgage in full.
Therefore, you are getting rid of one mortgage by replacing it with another mortgage with a refinance. However, with a loan modification, your current mortgage remains in place, but with different terms.
Loan Modification vs. Forbearance Agreements
A forbearance agreement is also different from a loan modification. Instead of modifying the terms of your original loan agreement, a forbearance agreement suspends your monthly mortgage payments for a specific period. A forbearance agreement can also reduce your monthly mortgage payments for a specific time instead of suspending the payments.
A forbearance agreement can be used when you have a short-term financial problem that makes it impossible for you to pay your mortgage payments or your entire mortgage payment each month. You may want to consider a forbearance agreement if you are ineligible for a refinance or a loan modification.
How to Apply for A Loan Modification in the Long Island Area – 3 Simple Steps
The process of applying for a loan modification on Long Island can be overwhelming when you are trying to do it without any assistance from a seasoned professional. However, when you retain a law firm like ours, that has worked extensively with homeowners to modify existing loans to save their homes, the process becomes easier and less stressful.
Our attorney’s office located in Huntington can help you apply for your loan modification in three simple steps:
· Collect Your Financial Information — Gather together copies of your tax returns, bank statements, and pay advices. Any financial information that you believe may be relevant can help us as we analyze your financial situation to advise you of your options for saving your home from foreclosure.
· Collect Your Mortgage Information — Pull together copies of your mortgage statements, copies of your loan documents, and a copy of your mortgage. Any information or copies you received when you signed your mortgage loan can be very helpful.
· Call Our Team to Schedule Your Consultation — Contact our office to schedule a consultation to discuss a loan modification and other options for stopping foreclosure actions.
Because we are also experienced Long Island bankruptcy attorneys, we can explore other legal options for stopping a foreclosure sale. If you do not qualify for a loan modification, a Chapter 13 bankruptcy filing can stop foreclosure and allow you to catch up your past due mortgage payments over a 60-month bankruptcy plan. In addition, you can also resolve other debts through the bankruptcy that you are unable to pay because of a financial hardship.
If you live in the Huntington area or anywhere on Long Island, Contact The Law Offices of Adam C. Gomerman by calling (631) 549-1111 to talk to a New York loan modification attorney about saving your home from foreclosure.