Tagged: mortgage modification

How to Get Approved for a Mortgage Modification Successfully

If the economy has left you unable to easily afford your mortgage you may be considering a mortgage modification in order to make the payments easier for you to make a month but figuring out how to successfully modify your mortgage is the key to the entire effort of trying to modify your mortgage. There have been many that have attempted to have their mortgage modified but have been rejected for a mortgage modification.

According to statistics the success rate for letting a law firm handle mortgage modifications is high when compared with the success rate of doing a loan modification on your own but there are some things that you can do if you are deciding to attempt a mortgage modification on your own.

  • Communicate – When attempting to modify your mortgage you will more than likely spend a good deal of time on the phone with bank representatives.  It is important to keep in mind that some of the time that you spend on the phone will be productive and some of the time won’t.  When speaking with representative it is important to get the name and ID number of the person you are speaking to and also to take notes of what you told them and what they said.
  • Do Your Math – Before attempting to start the process of a mortgage modification you will want to do some calculations to make sure you will be considered a candidate for a loan modification.  The general rule of thumb is that your monthly mortgage payment should be below 31% of your monthly income.  If your mortgage is already under 31% of your monthly income you will more than likely be denied a mortgage modification.
  • Explain Your Situation – When you apply for a mortgage modification you are usually required to write a hardship letter but sometimes instead of giving you the opportunity to explain your situation in a hardship letter the bank just asks you to check off a generalized situation in a box on a form.  It is a good idea regardless of if you are asked for a hardship letter or not to write one and give it to the bank. In your hardship letter you should explain your situation as to why you feel you are unable to afford your mortgage at its current amount and how you intend to make the monthly mortgage payments once your payments are lowered.
  • Try Again – If you have been denied a mortgage modification previously it does not hurt to try again especially if your financial situation has changed since the last time you applied for a mortgage modification or if you applied for the modification over a year or so ago. You may be suprised to find out that they may approve you this time around.
  • If You Need Help – Ask – Asking for help can make a huge difference in the outcome of your mortgage modification approval.  Hiring a real estate lawyer to handle your mortgage modification sometimes gets a higher success rate because a lawyer will be able to sit down with you and let you know what you should expect and if a mortgage modification is something that you will or will not be appoved for based on your specific situation.  A law firm handling mortgage modifications will spend the time on the phone with the bank for you saving you hours upon hours of time on the phone with the bank and as mentioned earlier mortgage modification lawyers often have a higher success rate in mortgage modifications than a home owner would because they are experienced in this field and know the in’s and out’s of the mortgage modification process.

If you would like to speak with a mortgage modification lawyer in Staten Island, New York call 718-979-4300 or email us though our contact form.

Lower Mortgage Interest Rates: Should I Refinance or Modify my Mortgage?

If you are currently a homeowner and have a high mortgage rate that you are locked into or if you have an adjustable rate you may be interested in lowering your mortgage rate or locking into the current rate.  Recently the mortgage rates dropped down to under 5% for the first time in months.

The governments efforts to make sure new buyers and current homeowners receive low mortgage rates are not only benefiting the new buyers and homeowners seeking to purchase a new home but it is also benefiting those who are looking to modify or refinance their mortgage (although studies have shown that many people have not been choosing to modify their mortgage but rather prefer to refinance). A study which was done over the past year showed that only approximately 10,000 people modified their mortgages whereas approximately 3 million mortgages were refinanced and on average the people who refinanced their mortgages saved an average of $150 per month.

A lot of people believe that the reason mortgage modifiications are not as popular as refinancing is simply because banks have offered refinancing options to their clients for years and it is a simple process that they are used to doing.  Another reason for mortgage modifications being less popular among homeowners looking to lower their monthly payments is possibly because they are not fully aware of what modification to their mortgage is whereas, similar to the banks, they are used to the idea of refinancing.

To help you understand what mortgage modifications are and what refinancing is here is a description of both:

  • Loan Modification – The process where the terms of the mortgage is modified outside of the original terms of the mortgage agreement (contract) agreed to by the borrower and lender.  The loan may be modified to change the terms of the interest rate, loan terms, loan balances, the length of the loan or any other part of the loan agreement.
  • Loan Refinance – The process where an existing debt obligation is replaced with a new debt obligation with different terms.  You are essentially paying off an old loan with a new loan with different terms.

Refinancing or modifying your loan may be a smart thing for you to consider if you:

  • Currently have a high mortgage rate
  • Have an adjustable rate mortgage (commonly known as ARM)
  • Need extra cash
  • Want to consolidate high interst credit cards

If you would like to discuss the legal side of refinancing with a real estate attorney to make sure your best interest is being looked after contact Steven T. Decker Staten Island real estate attorney at 800.976.4904 or 718.979.4300.

Benefits to mortgage modifications

Homeowners who are struggling to pay their mortgage are now having a chance to have their mortgage modified under the new foreclosure prevention program which went into effect on March 4, 2009.   This prevention program was created to help homeowners who are considered delinquent or an at-risk mortgage.  The lenders are encouraged to offer their current borrowers a lower interest rate.  One of the provisions under this foreclosure prevention program is to make sure the interest rates being offered to borrower who is struggling to pay their mortgage does not exceed 31% of the borrowers gross monthly income.

Since President Obama put the foreclosure prevention program into effect JP Morgan Chase has reported to have issued more than 15,000 loan modifications.  Bank of America did their part by sending out letters to over 100,000 eligible borrowers letting them know of the potential opportunity to do a mortgage modification.

If you would like to discuss having a mortgage modification done or regarding any other real estate matter you can contact Steven Decker, Staten Island real estate attorney.