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Office Location:

Suffolk Office:
222 Middle Country Road, Suite 206
Smithtown, NY 11787
Phone: (631) 265-0102

Nassau Office:
1225 Franklin Avenue, Suite 325
Garden City, NY 11530
Phone: (516) 559-7219

Manhattan Office:
5th Ave, Suite 1007
New York, NY 10017
Phone: (917) 464-3815

Loan Modification

A loan modification is an alternative to foreclosure. A modification is an effective way to re-negotiate the terms of a loan and restructure payments so that your payments become more affordable and you are able to make them on time. Once a loan modification is successfully obtained, you are no longer under the threat of foreclosure if you remain current with your mortgage payments.

Using a loan modification our team can help you avoid foreclosure. Throughout the process, we will protect your rights, expedite the loan modification process, and above all, look out for your best interests.

The benefits of retaining a loan modification attorney:

While you can attempt to negotiate for a loan modification yourself, that is not recommended. There are significant benefits to working with an experienced loan modification attorney to receive a modification of your mortgage.

It is important to understand your rights when applying for a loan modification. Some lenders will attempt to keep you on an adjustable rate mortgage or fool you into signing a predatory loan. Don’t fall for these deceptive practices.

Retaining a lawyer will bolster your negotiation power because lenders take lawyers more seriously than independent home owners. Using our experience with the loan modification process, we will work to get you the best possible deal on your modified loan. It is highly likely that one of our team members has worked with and dealt with your lender previously, therefore, we will know what needs to be done to obtain the right loan modification for you.

After attentively reviewing your case we will formulate the best custom-made goal to help you in your time of need.

Loan modification overview:

Mortgage modification is a process where the terms of a mortgage are modified outside the original terms of the contract agreed to by the lender and borrower. Any change to the mortgage terms is a modification. Mortgages are modified to the benefit of the borrower in one or more of the following ways:

  • A reduction in interest rate, a change from a floating to a fixed rate, or a change in how the floating rate is computed
  • Reduction in principal
  • Reduction in late fees or other penalties
  • Lengthening of the term of the loan
  • Capping the monthly payment to a percentage of household income
  • Mortgage forbearance program

The borrower can be current, late, in default, or in foreclosure at the time the application for modification is made. The programs available will vary accordingly.

Qualifications:

Not everyone facing foreclosure that applies for a loan modification will receive it. There are certain stipulations and qualifications you must fulfill in order to be approved. Although every lender’s qualifications are slightly different, there are several universal criteria to fulfill, some of which are listed below.

  • The property in question must be your primary residence and a single family home. Under Federal law, you cannot modify the mortgage of a rental property.
  • Not vacant or condemned.
  • A lender will not allow you to modify your mortgage without a steady income that guarantees that a default will not occur again; it is not a sound business plan for them.
  • As stated above, there are lender-specific qualifications as well. We can discuss these specific qualifications with you during a free consultation.
  • If your property does not fulfill these specific criteria, do not panic. There are other options besides loan modifications for those that are facing foreclosure. Other options include bankruptcy, deed in lieu of foreclosure, and short sales.

Loan forbearance:

Forbearance literally means "holding back". It is defined as a special agreement between the lender and the borrower to delay a foreclosure. Forbearance is simply short-term relief for the borrower since it delays payments to a later date when the borrower is able to become current with their mortgage. Forbearance does not excuse the homeowner from any debts or unpaid monthly payments.

There is a stark contrast between forbearance and modification. In forbearance, the borrower is simply weathering the storm of a temporary financial hardship until they are able to pay off the interest and principle of the mortgage. In a modification, however, it is understood that the mortgagee will never be able to become current again. We will offer you our best advice when it comes to these options and determine which road is best for you to take given your current situation.

Looking out for bad loan modifications:

Before beginning any legal process, it is important to know the warning signs of scams and fraudulent contracts. Loan modifications are generally known as one of the safest venues for becoming current on your mortgage once again. However, it is of utmost importance to keep an eye out for unethical and illegitimate practices. Our team knows how to detect an illegitimate practice, and will help you avoid it in pursuit of better options.

Frequently asked questions about loan modifications:

Q. What is the basic definition of a loan modification?
A. A loan modification is any change to the original contract that is agreed upon by both the lender and borrower. Generally, loan modifications are used to avoid foreclosure by allowing the borrower to once again become current on their mortgage because of the negotiated modification makes payments easier.

Q. I’ve looked into both forbearance and modification. Are there any significant differences?
A. Forbearance is temporary relief for those struggling with their mortgage. Individuals that are under forbearance are expected to "bounce back" without a modification and become current on their mortgage again after their financial hardship has been straightened out. A modification is similar in that it is used as relief for those that are struggling with their mortgage; however, it is a permanent change.

Q. I don’t have a steady income, and therefore don’t qualify for a modification. What alternatives are there for me?
A. There are other methods for avoiding foreclosure. Options such as, bankruptcy, deed in lieu of foreclosure, and short sales have historically all proved effective in avoiding foreclosure.

Q. A few companies have recently contacted me and offered help for my current mortgage situation, calling themselves either banks or law firms. They seemed legitimate, so what’s different about your law firm?
A. Because of the economy’s current recession, it has become "hunting season" for scammers. Scammers prey on vulnerable homeowners who are looking to do anything to remedy their current situation. These scammers are really just interested in either buying your house at a discount or involving you in a new loan that is actually worse than your current one. This process is called predatory lending.

Q. My friends told me that a bank is not likely to listen to my negotiations even with an attorney working with me. They said the bank would rather foreclose on the property than modify my mortgage. Is this true?
A. No. Foreclosure is a longer, more painstaking process for both lender and borrower. Nine out of ten times, a bank would rather modify a mortgage than foreclose on a property. Having an experienced lawyer to advise you helps facilitate and complete this process.

Ronald S. Cook is a Bankruptcy Attorney that proudly serves New York City, Manhattan, Nassau County and Suffolk County on Long Island, New York, NY. We offer reasonable rates and payment plans. CALL US TODAY AT 631-265-0102 or EMAIL US FOR YOUR FREE BANKRUPTCY REVIEW.