Personalized attention is paramount in our approach to your mortgage crisis. We will spend time getting to know you and understand the details of your personal situation. Working with you each step by step we will structure a realistic solution and be sure that you understand your options and execute the best solution for you. Our extensive experience in all mortgage products including conventional, sub-prime, jumbo, and Pay Option ARMs will provide you with the assurance that you have found the Best Team with the most comprehensive customer service personnel representing you.
You are current in your mortgage payments BUT you know you are nearing the time when it will be difficult or impossible to remain current, because:
*Your monthly mortgage payment has increased, and/or
*Your income has decreased, and/or
*You have, or will have, extraordinary unanticipated expenses, and/or
*Your other regular monthly living expenses are increasing.
YOU DO NOT HAVE TO WAIT UNTIL YOU ARE IN, OR FACING, A FORECLOSURE BEFORE INITIATING STEPS TO MODIFY YOUR MORTGAGE! The sooner that you begin the process of modification the better for you and the lender.
We will approach your lender with a presentation that shows why you will need a modification to prevent future foreclosure, just as we would seek a modification to cure existing defaults and terminate already commenced foreclosures. If the impending circumstances indicate to the lender that it will be facing the same undesired results months down the road, the lender will be willing to address the modification request at this earlier stage, because “AN OUNCE OF PREVENION IS WORTH A POUND OF CURE”, and the lenders know it!
Just as you would prefer to sooner avoid, rather than to have to later solve a mortgage payment problem, lenders, too, have much to gain by dealing with, and resolving the need for modification:
*BEFORE there is a payment default, which requires lender notices,
*BEFORE they have to send a Notice of Default, and move your loan
from the “performing” pile to the “non-performing” pile,
*BEFORE they have to hire an attorney to prepare, and file, foreclosure lawsuit papers,
*BEFORE they have to spend the time, money and resources litigating that foreclosure lawsuit.
IF YOU BELIEVE THAT YOU ARE FACING THIS SCENARIO, DO NOT WAIT UNTIL YOU ARE IN DEFAULT AND THE BANK STARTS A FORECLOSURE – THAT WILL ONLY INCREASE YOUR LIABILITY AND EXPOSURE, AND POSSIBLY MAKE THE MODIFICATION PROCESS MORE DIFFICULT.
In addition, modifying your mortgage before you default prevents unnecessary damage to your credit rating. Enjoy the best of both worlds: modify your mortgage payment down to an amount you can comfortably afford, and keep your credit score high and in good standing by doing so before you default as that will inevitably lower your credit score!
Remember the greatest loss for the Lender is when a property goes into foreclosure. When the lender takes a property back they have to secure the property, repair any damages (often these properties are vandalized with the copper plumbing, appliances, fixtures and anything else of value being stolen), if the lender doesn't repair the damages it further reduces the value. They then market the property and have to pay a real estate broker a commission and pay for maintenance and upkeep. When the bank then finally markets the property for sale, they are selling a property with the stigma of being an REO property (Real Estate Owned). The marketplace knows that REO properties are regularly sold at 35% to 50% less than a traditional arms length transaction.
Therefore, it is in the Lenders best interest to work with the current owner and MODIFY the existing loan even on an investment property, thereby minimizing their losses while keeping the property from becoming an REO and having a performing loan once again.
The Lenders are now faced with both (i) external pressure from the Federal and State Governments, and (ii) their own internal pressure from within, to help revitalize a significant facet of the economy – the stabilization of the housing market. Perhaps the most distressing problem that affects most consumers, and literally, “hits you where you live” is the foreclosure climate.
The foreclosure rate is higher than it has ever been in this country’s history!
Thus, everyone – every government agency, legislators, politicians on local, state and federal levels, are exerting EXTREME pressure on the lenders to eliminate the foreclosures and stabilize the housing market.
NOT by completing the foreclosures and removing the millions of people who cannot afford their mortgage payments from their homes,
BUT by replacing these mortgages in foreclosure with performing mortgages, and keeping those millions of people who cannot afford their current mortgage payments in their homes with new terms that are affordable!
When First American Loan Modification, LLC prepares and presents to a lender a loan modification package, the presentation is professional, complete and details all problems, as well as the long-term resolutions. Our professional services normally allow a lender to give a positive approval to a loan modification request in the shortest time period.
We are going to represent you, NOT THE BANK and will get you the best terms available. Many lenders when dealing directly with the borrower only offer very small benefits to the borrower and unknowingly the borrower accepts the meager and insufficient terms not realizing just how far the lender would be willing to go. A loan modification is a complex process that requires tying together many different facts, property value, borrower income, borrower expenses, long-term investment yield and the wildcards of bankruptcy, property vandalism etc.
Approximately 50% of the borrowers that utilize our services have attempted loan modifications directly with their lender and have been unsuccessful and frustrated by the runaround that they were subjected to. Many were offered terms that had no long term benefit, but only resolved the near future, putting the borrower in the position of an unaffordable payment again within a few years.
Our services normally provide a PERMANENT reduction and solution not a short term band aid. Banks and mortgage lenders nationwide have been severely impacted by the current collapse of the financial services market. They want to restore liquidity and stability to their mortgage portfolios. We can professionally prepare a complete loan modification application to present to your current lender or the Federal Agency that has taken over your loan. Past experience has proven that a complete package which includes all necessary components for a loan modification have the highest probability of being granted.
Please allow us to assist you and take you step-by-step through the process and answer your questions and give you the personal one on one service that you deserve.
The advantages of the timing of your initiating action does not limit your options. You still have the ability to avail yourself of one of numerous remedies to solve your problem and move forward with your financial life:
Loan Modification- Your current lender modifies your current mortgage in order to make your mortgage more affordable for you and avoid a foreclosure for the lender. A modification can include an interest rate reduction, change of loan term, and sometimes reduction of principal. Historically, modifications were only used when a borrower was delinquent but now it is being utilized to avoid an impending default due to various circumstances.
Forbearance- Even before a Notice of Default has been filed, a forbearance can be negotiated; however, this is a short term solution or “band aid” and may be a step towards the preferred long-term solution of a loan modification. Forbearance means that the lender has agreed that you may defer or reduce payments for a short period of time, with the understanding that another option will be used at the close of that period to bring your account to a current status. The options can include sale of the property, a refinance or a loan modification. This will temporarily hold off legal action.
Short Sale - This is utilized when you are “upside down” on your mortgage – which means that you owe more than the property is worth and you do not want to remain in the property. The lender in this instance will agree to the property being sold for less than the mortgage balance, even though it means that the lender takes a loss. You offer the home for sale and all offers are presented to the lender. Unlike a traditional sale, where the homeowner makes decisions, in this scenario the lender makes the final decision on price and terms. Of utmost importance is the negotiation with the lender regarding a 1099 issued to the borrower and filed with the IRS for the amount of the loss that the bank absorbs. If a 1099 is issued and filed then you may owe state and federal income taxes because forgiven debt may be characterized as taxable income. We can help to negotiate the best terms for you in the situation of a short sale to limit the impact to you financially and on your credit report.
Deed-in-lieu – This is unique remedy that can be mutually beneficial to lender and borrower: a classic “you wash my back, I’ll wash yours” situation between you and your lender. A “deed-in-lieu of foreclosure” is, literally that – a lender takes your house as the collateral for the unpaid mortgage loan, but instead (“in lieu of”) its having to expend substantial time and money to reach that result, the lender acquires the property because you, the borrower, convey it voluntarily – by signing over to the lender a “deed” – the instrument by which you transfer to the lender all your interest in the property. The theory here is that, where the property may already be worth less than the amount you owe against it, it will be to the advantage of both you and the lender to eliminate the time that a foreclosure takes (during which the value of the property may decrease even further) and the expense (which will be your obligation, but which the lender may never be able to recover from you). The deed in lieu of foreclosure helps both the lender and borrower: (i) for the lender, it accelerates its acquisition of the property with less expense of time and money that the lender may never recoup, enabling it to resell the property sooner than later, and mitigate its losses; (ii) for the borrower, you avoid further liability for additional costs, and devaluation of the property (the borrower is initially still responsible to repay the entire loan, even if the house is worth less than the loan amount), and escape that subsequent personal debt obligation, usually a substantial one. Simply, in exchange for the advantage the lender realizes from the borrower’s consensual delivery of the deed, the lender will release the borrower from the remaining shortfall liability. The lender shows its appreciation for the borrower not forcing the lender through the arduous foreclosure process by allowing the borrower to “close the book” on the debt, and negate the residual liability. You will also avoid the time, expense, aggravation and embarrassment of foreclosure proceedings, which are matters of public record. CAUTION: In recent years, laws have been added t protect borrowers from unfair or oppressive “deed-in-lieu” transactions, as for example where a borrower is “convinced” (perhaps defrauded) into signing over the property to the lender when its value may still be significantly higher than the loan amount. In this situation, borrowers lose the equity they had in the property, and the lender realizes a windfall, the reselling the house for more than the loan amount, with no obligation to return any of that windfall to the borrowers! You must be sure that you have done a full investigation of property value, and protected yourself with counsel before signing a deed-in-lieu of foreclosure to your lender.
Chapter 13 Bankruptcy – The primary purpose of this specialized bankruptcy procedure is to stay, and then prevent, impending foreclosure of your house. Where arrears have built up, which you cannot pay in one lump, but you have the steady household income necessary to both remain current in monthly payments going forward, and pay those accrued arrears in installments, over a period of time (usually in the 3-5 year range), you can propose a plan to repay the arrears, and stop the lender from foreclosing, as long as: (i) the Bankruptcy Court approves your proposed plan, and (ii) you meet the obligations (timely payments) required by that plan. In some instances, the Bankruptcy Court will compel a lender to accept a loan modification as a part of the Chapter 13 process. Another advantage of this process is that a borrower can sell or refinance the house during the “plan” period, and end the plan, as the lender will be fully repaid (or you can negotiate a short sale or other settlement, now from a “position of strength”, rather than the position of inherent weakness facing most borrowers in foreclosure). Of course, there are disadvantages (for example, damage to your credit - but sometimes that damage is not much worse than the damage that a foreclosure would cause to your credit). CAUTION: Chapter 13 is a highly specialized area of Bankruptcy Law, which is, itself, a high specialized area of law. Chapter 13 is more suitable for some borrowers that others, and many different factors relating to the individuals specific overall financial picture should be analyzed. You should consult counsel with not only Bankruptcy Law expertise, but specifically Chapter 13 expertise in determining whether to pursue this option.
Legal Services provided by:
DeLisa Law Group, PLLC.
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