Mortgage Modification

Babylon Mortgage Modification Lawyers

Serving Clients in Long Island and Throughout New York, New Jersey, & Connecticut

Are you struggling to keep up with your mortgage payments? Have you fallen behind and fear an imminent foreclosure process by your lender? If so, a mortgage modification could be the answer for avoiding the loss of your home. At Fine Law Offices, we have focused most of our practice on helping homeowners avoid such a loss through the use of foreclosure defense tactics. Our experienced team has been in the business of helping homeowners in the Tri-State area since 1977, accumulating decades of experience, excellent results, and great reviews, while handling over 7,000 modifications.

What Is a Mortgage Modification?

A mortgage modification consists of making significant changes to your loan terms through negotiation with your lender. This process can begin when you know you are facing financial difficulties and will no longer be able to keep up with payments. It may also be entered into if you have already missed one or more of your mortgage payments. Various methods can be used to restructure your loan but the priority is to benefit both you and your lender: you remain in your home with an affordable payment and your lender avoids the costs of foreclosure and the marketing and selling of your property.

In general, mortgage modifications are based on the fact that you are suffering substantial financial hardship. Financial hardships can commonly follow such events as:

• An unpredicted illness or injury in your family or for a co-signer that leads to heavy medical bills and out-of-pocket expenses.
• A job loss or cut in hours or pay.
• An expensive divorce.
• The sudden death of a spouse or other co-signer leading to a loss of income.
• The downturn or failure of a family business.
• A loss of property that was uninsured.
• Unforeseen hikes in the cost of housing, such as for property taxes or association fees.
• Some other disaster or event leading to financial hardship, such as 2020’s COVID-19 pandemic.

Some lenders do not offer mortgage modifications despite valid financial distress. Because of this, it is vital that you thoroughly understand your original loan documents and the options that may be available to you. You must also understand that a mortgage modification will lead to a hit on your credit rating. However, this detriment will generally be much less than the more severe negative effect of a foreclosure.

How Your Mortgage Can Be Modified

Modifying the terms of your mortgage can be accomplished in various ways. How it could be done will depend on how your mortgage is structured and the circumstances of your situation. Terms can be altered to your existing loan in the following ways:

• Your interest rate can be reduced; lowering this rate can reduce your monthly payment. However, this method may result in a slowly increased rate at later periods, commonly every five years for the rest of the loan’s length.

• The life of your loan can be extended; spreading your payments over a longer time period will decrease your payment amount. The down side of this is that you will wind up paying more in total interest over the loan. To counteract this, you can make a higher payment amount later when your finances have recovered.

• Your adjustable rate can be changed over into a fixed rate. Fixed-rate loans result in set payment amounts that do not change based on the interest rate. Thus, they are more predictable.
• Past-due amounts, like interest, fees, and escrow, are added into your balance and then re-amortized according to the new terms. In some cases, past-due fees may be waived.

Applying for a Mortgage Modification

You will have to make a formal application in writing to your lender or loan servicer for a mortgage modification. Your application will involve documenting the financial distress that has caused your payments to become unrealistic. Other documentation will be required as well, such as financial information in the form of tax returns, pay stubs, monthly expenses, bank statements, investment accounts, and other relevant information.

Figuring out a workable proposal that can be made to your lender as to how to alter the terms of your loan is important. You will need to show the lender that the modifications you propose will result in the ability to pay your mortgage. This entire process can be daunting from understanding the current terms of your loan to documenting everything that is needed, figuring out the right modification that will work for you, and negotiating with your lender to get a good result. This is where Fine Law Offices can provide outstanding and experienced legal help.

You Can Rely on Our Mortgage Modification Team

Our firm is here to help you throughout the entire mortgage modification process, starting with a review of your current loan documents to size up where you stand, your current balance and payment history, and what your options may be. From there, we can devise a strategy involving a restructuring of your loan that will work for you, documenting all the required paperwork to submit to your lender. Once this groundwork is done, we can use our honed negotiation skills with your lender to get the best possible result. After re-negotiating millions in loan modifications over many decades, we have gained the experience and knowledge needed to help you save your home or property and move forward into a better future.