An Alternative to Foreclosure or Selling Your Home
A loan or mortgage modification is a negotiated change to your contract with the mortgage bank or other lending institution, such as a rate reduction or even reduction in principal, with the goal of making the mortgage affordable. Modification can be an effective means of preventing foreclosure and avoiding bankruptcy, if you qualify.
At the Law Offices of Scott R. Schneider, I help homeowners in New York understand their rights and options in seeking to modify a mortgage or loan. Contact me to schedule a free initial consultation at my offices in Hicksville.
Do You Qualify for a Loan or Mortgage Modification?
In most cases, your total household income will determine whether or not you qualify for a loan or mortgage modification. This can be good news, since this means that you will be able to rely on income figures that were not factored into the original loan application, including a spouse's income, home business income or Social Security benefits.
There are also specific hardships that can lead to a loan modification, including:
- Illness, loss of job, significant decrease in income or job relocation of the borrower
- Inability to sell the property (see short sales)
- Inability to find renters for the property
- Death of the borrower or the borrower's spouse or co-borrower
- Divorce
- Unexpected medical bills
- Military service
- Natural disaster or other substantial damage to the property
Entering into a discussion about loan modification with your bank or mortgage-holder does not automatically stop the foreclosure process. It is vitally important to consult an attorney who can protect your interests on several fronts simultaneously.
Comparing Loan Modification to Bankruptcy
Loan modification may be an option for property owners who are seeking to avoid foreclosure and can afford a reduced monthly mortgage payment. It may also be an option for those who are experiencing a substantial but temporary financial setback. On the other hand, Chapter 13 bankruptcy may offer you the best solution to the overall problem while allowing you to protect your home or other property from foreclosure.
It is important to be cautious when seeking advice regarding loan or mortgage modification or renegotiation. There are many less-than-reputable companies advertising these services on the Internet. In order to protect yourself, your best option is to discuss your rights and options with a licensed attorney. Contact me to discuss the full range of options available under the law.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
