I get several calls each week at the office and on my radio show from people who ask about Loan Modification in Massachusetts and bankruptcy in regard to either lowering their monthly mortgage payments, or saving their home from foreclosure, or for a host of other reasons. A loan modification and a bankruptcy are apples and oranges, that is to say, they are two completely different options and each can stand alone without the other.
A loan modification is typically a request by a borrower for their lender to change the terms of their loan. This may involve changing all or some of the following: your interest rate, your principal balance, your past due amounts, waive collection costs, late fees, legal fees or auctioneer fees. A loan modification can also change your loan from an adjustable rate to a fixed rate in some instances. But the most important thing to keep in mind about a loan modification is that the decision to grant or not grant a loan modification is entirely up to the bank. The Mortgage Modification in Massachusetts and promissory note that you signed when you bought your real estate or refinanced are the legally binding documents that control your relationship with your lender, unless the lender says otherwise. Because loan modifications are discretionary, you typically have no rights if the bank refuses to give you a loan modification. There are rare cases where you may have right to sue the bank for not giving you a loan modification, but going down that road is long and costly.
So what to do if you want a loan modification? Your bank may have a website where you can fill out their specific loan modification application. Your bank may use a formula to determine your ability to participate in a loan modification and if you are currently past due on your mortgage, that can actually be a benefit when asking your bank to modify your loan. After all, if you are current with your mortgage and paying on time every month, what incentive would your bank have to change the terms of your loan? The reality is that most people who request a loan modification are behind on their mortgage and need the bank to make some changes to their loan in order to make the house more affordable. You will need to gather your financial documents such as tax returns, paystubs or other evidence of income to show your bank that you have money coming in on a regular basis. Also, you should write a hardship letter to explain to the bank what caused you to fall behind with your mortgage payments and that you have resolved those problems and anticipate being able to make your monthly payments if the bank gives you a loan modification.
While the process of submitting a loan modification is relatively straightforward, the difficulty usually lies in the constant follow up that will be required from you to make sure that the bank has your package and that it is complete. Banks commonly lose paperwork and requests from them for you to resubmit your loan modification package are quite common, so be sure to make legible copies of everything that you send to your lender, in case you need to send it again. It may take anywhere from 3 months to well over a year to get an answer from your bank on whether your modification has been granted. The important thing to remember is that even though your bank is reviewing your loan modification application, they can still pursue their legal right to foreclose on your real estate, that is why some people are confused after confirming with their bank that their loan modification application is complete and awaiting a decision, only to get a letter from their bank’s attorneys advising that they are Foreclosure Prevention and Assistance in Massachusetts proceeding against them.
Remember that the bank is going to take the necessary steps to protect what is best for the bank, and you should take the necessary steps to protect what is best for you. You should have your own attorney advising you so that your bank will not beat you on some technicality. Your chances of getting what you want drastically increase if you have an experienced lawyer advising you every step of the way, and unfortunately, without a lawyer, you can be left at a great disadvantage and at greater risk for losing your home.
If you are in a bankruptcy, you need to know that the bankruptcy judge has no authority to lower your monthly payment or change the terms of your mortgage or note on your residence, except in a Chapter 13 bankruptcy where the court has the authority to “strip-off” or get rid of your second mortgage or home equity line of credit provided you meet certain requirements. It is possible, however, to ask your lender for a loan modification while you are presently in a bankruptcy. If you are in a bankruptcy, it may be helpful to you to have court oversight and protection, but if you are not in bankruptcy, or do not need to file bankruptcy, then you will have no court protection from your lender and you must be vigilant to make sure that your rights are protected.
In order to determine if a loan modification or bankruptcy or even a combination of both may be best for you, the best person to evaluate your case is an experienced bankruptcy attorney who will be able to analyze your specific circumstances from all sides and provide you with useful advice.
This content has been taken from: http://massloan.inube.com/blog/737004/loan-modification-in-massachusetts-retain-your-home/
A loan modification is typically a request by a borrower for their lender to change the terms of their loan. This may involve changing all or some of the following: your interest rate, your principal balance, your past due amounts, waive collection costs, late fees, legal fees or auctioneer fees. A loan modification can also change your loan from an adjustable rate to a fixed rate in some instances. But the most important thing to keep in mind about a loan modification is that the decision to grant or not grant a loan modification is entirely up to the bank. The Mortgage Modification in Massachusetts and promissory note that you signed when you bought your real estate or refinanced are the legally binding documents that control your relationship with your lender, unless the lender says otherwise. Because loan modifications are discretionary, you typically have no rights if the bank refuses to give you a loan modification. There are rare cases where you may have right to sue the bank for not giving you a loan modification, but going down that road is long and costly.
So what to do if you want a loan modification? Your bank may have a website where you can fill out their specific loan modification application. Your bank may use a formula to determine your ability to participate in a loan modification and if you are currently past due on your mortgage, that can actually be a benefit when asking your bank to modify your loan. After all, if you are current with your mortgage and paying on time every month, what incentive would your bank have to change the terms of your loan? The reality is that most people who request a loan modification are behind on their mortgage and need the bank to make some changes to their loan in order to make the house more affordable. You will need to gather your financial documents such as tax returns, paystubs or other evidence of income to show your bank that you have money coming in on a regular basis. Also, you should write a hardship letter to explain to the bank what caused you to fall behind with your mortgage payments and that you have resolved those problems and anticipate being able to make your monthly payments if the bank gives you a loan modification.
While the process of submitting a loan modification is relatively straightforward, the difficulty usually lies in the constant follow up that will be required from you to make sure that the bank has your package and that it is complete. Banks commonly lose paperwork and requests from them for you to resubmit your loan modification package are quite common, so be sure to make legible copies of everything that you send to your lender, in case you need to send it again. It may take anywhere from 3 months to well over a year to get an answer from your bank on whether your modification has been granted. The important thing to remember is that even though your bank is reviewing your loan modification application, they can still pursue their legal right to foreclose on your real estate, that is why some people are confused after confirming with their bank that their loan modification application is complete and awaiting a decision, only to get a letter from their bank’s attorneys advising that they are Foreclosure Prevention and Assistance in Massachusetts proceeding against them.
Remember that the bank is going to take the necessary steps to protect what is best for the bank, and you should take the necessary steps to protect what is best for you. You should have your own attorney advising you so that your bank will not beat you on some technicality. Your chances of getting what you want drastically increase if you have an experienced lawyer advising you every step of the way, and unfortunately, without a lawyer, you can be left at a great disadvantage and at greater risk for losing your home.
If you are in a bankruptcy, you need to know that the bankruptcy judge has no authority to lower your monthly payment or change the terms of your mortgage or note on your residence, except in a Chapter 13 bankruptcy where the court has the authority to “strip-off” or get rid of your second mortgage or home equity line of credit provided you meet certain requirements. It is possible, however, to ask your lender for a loan modification while you are presently in a bankruptcy. If you are in a bankruptcy, it may be helpful to you to have court oversight and protection, but if you are not in bankruptcy, or do not need to file bankruptcy, then you will have no court protection from your lender and you must be vigilant to make sure that your rights are protected.
In order to determine if a loan modification or bankruptcy or even a combination of both may be best for you, the best person to evaluate your case is an experienced bankruptcy attorney who will be able to analyze your specific circumstances from all sides and provide you with useful advice.
This content has been taken from: http://massloan.inube.com/blog/737004/loan-modification-in-massachusetts-retain-your-home/