With the devastating downturn in the economy and real estate market, many homeowners found themselves “underwater” on their mortgages owing hundreds of thousands more than their homes could be sold for in the current market. Combine this with loss of a job or reduction of income and many homeowners had to either walk away from their homes or helplessly watch as their nest egg was foreclosed upon. An alternative to foreclosure for some is a loan modification. It is not easy to get a loan modification, and it is in your best interests to work with a Clermont loan modification lawyer if you decide to pursue one.
What Is a Loan Modification?
Contrary to what many people think, loan mods are not new. They were used in previous severe economic downturns, such as the Great Depression. In essence, it takes into account the current income of the borrower and provides a reduction in monthly payments to below 31% of this.Your Clermont real estate lawyer will tell you that just because you are unable to make your current house payment, you are not automatically qualified. Rather, you will need to do the following:
• Prove financial hardship. This must be significant enough to disallow you from making your monthly house payment.
• Currently have an income. You cannot be out of work and get a modification. The lender wants assurance that you will be able to pay the new monthly mortgage; otherwise, there would be no point to allowing you a modification.
• Show that your monthly house payment exceeds 31% of your gross income.
What Are the Advantages and Disadvantages of a Modification?
The greatest advantage of obtaining a loan modification is that you are thereby allowed to stay in your home while paying a monthly payment you can afford. This is usually a borrower’s last option before seeking personal bankruptcy or allowing the home to be foreclosed upon. One signification disadvantage to a modification is that it records much like a bankruptcy on your credit report. Given that many homeowners seeking modifications are likely behind on payments anyway, and perhaps are not current on other bills, this may not be as deleterious a result as it otherwise might be.
Call Today If You Want To Speak To A Clermont Loan Modification Attorney
You may find yourself dealing with a lender who is unethical and has no true interest in helping you keep your home. Make sure that you have legal representation on your side—you can be sure that the lender does. Call a Clermont real estate lawyer today: Merideth Nagel, P.A., Attorney at Law. 352-404-4634.
Serving West Orange County, Lake County, Sumter County & Marion County