The majority of people are currently out of pocket with many unable to pay their mortgage.
After the Federal Reserve announced a $1.2 trillion injection, Donald Trump stated that mortgage lenders will show leniency with repayments to prevent a surge in mass homelessness. This period of forbearance will extend for a period of 3 to 4 months. [1]
Mark Calabria of the Federal Housing Finance Agency also urged anyone whose mortgage was sold to Fannie Mae or Freddie Mac to apply for a loan modification to avoid losing their home to a foreclosure [2].
This could be seen as a silver lining within a very dark cloud.
But, on Sunday, March 22, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration made a statement to say that the financial protections they are offering will apply to those who are more current on their mortgage [3].
This leaves delinquent homeowners in a very dark place indeed.
As everyone is racing to save their homes, banks will soon be overwhelmed with home loan modifications. And when a mortgage lender is burdened with applications, they’ll naturally prioritize who they’re going to help first.
It’s essential that homeowners who are already delinquent on their mortgages take action now to save their homes.
Loan Modifications
A loan modification is a change to your mortgage repayment terms that you agree with your bank to reduce your payments. Loan modifications enable you to lower your payments so that you can get current on your mortgage.
The amount you repay is still the same but the interest rate may be lowered, the repayment period extended or it might be swapped for a different loan entirely.
What Can You Do If You Are Over 3 Months Delinquent?
All home foreclosures have been halted for around 3 months so everyone gets a bit of breathing space. But, if you’re already delinquent, chances are you’re getting a little hot under the collar.
What can you do, then?
You may not think so but there could be a way around this and you just don’t know it yet. Most people think they can get away with dealing with mortgage lenders themselves. But, what they don’t realize is that there are many technicalities in the financial legal system that only a trained foreclosure attorney knows.
Another thing to understand is that mortgage lenders are adept at intimidating borrowers into foreclosures. Many times they play foul of the system but as a regular citizen, you won’t necessarily know that.
A trained foreclosure attorney has a detailed knowledge of the law, your rights, and the deceptive and intimidating practices that some mortgage lenders can regrettably use.
Perhaps your lender has already rejected your application for a loan modification and so you’re resigned to losing your home. Think about it, though. Of course, they’ll reject your loan modification application if they’re going to lose money.
This is a mistake many people make. Just because your lender rejected your application, it doesn’t necessarily mean that it will be rejected again so why not try again?
See A Foreclosure Attorney
You’re likely already broke, and the prospect of hefty legal fees probably sends shivers down your spine.
But what if a foreclosure attorney managed to get the foreclosure process on your home completely canceled?
This is what foreclosure lawyers do. They know the law surrounding foreclosure in intimate detail. They are also highly trained in negotiation tactics and know-how to combat the intimidation mortgage lenders use to force people out of their homes.
What Can a Foreclosure Attorney Do?
It’s important that you realize that there could be a way out of this mess even if you don’t feel that way right now.
Remember:
- A mortgage lender is required by law to respond to an attorney within a certain amount of time. If you’ve applied for a loan modification yourself, chances are your lender doesn’t return your calls and leaves you in the dark for weeks on end. An attorney carries more weight and they’ll get answers far quicker than the average person.
- They can help you avoid a delinquency judgment. An effective lawyer can negotiate terms on your mortgage so that you don’t owe any money if your foreclosure gets canceled.
- They can potentially get your foreclosure canceled. If your lender has not followed the correct procedure in their pursuit of outstanding monies from you, they are considered to have broken their side of the contract. This renders their foreclosure proceedings null.
An attorney will search through the fine print on your promissory note, your mortgage agreement, your bank statements, and all related correspondence. If they find a lender has made a mistake - they started foreclosure proceedings or they sent the wrong letter, for example - they can formulate a case to get it thrown out of court.
Now, this isn’t a guarantee, but you’d be staggered at how many Americans have lost their home because they were not fully aware of their rights as a borrower.
Legal fees are high, yes, but in the grand scheme of things, it’s an investment that should pay dividends. Also, don’t forget that your legal fees can be broken down into three payments to make it easier for you.
Don’t Wait Another Minute
It’s vital that you take action right away as the longer you leave it, the harder it’ll be to get your loan modified successfully.
Your attorney needs to get the ball rolling as soon as possible. And, with the current surge in loan modification applications, lenders are getting swamped. The sooner you act, the better your chances of saving your home. Don’t wait another minute.
