Mortgage Modification

Using an Attorney to Enact the Obama Plan for your mortgage modification

When President Obama announced a new home mortgage modification plan, many people rejoiced. This is because there are new rules in place allowing a person that is having trouble paying his/her mortgage find a reprieve and avoid foreclosure. Yes, this is a true godsend for many people that have their backs up against the proverbial wall. However, it would be incorrect to assume all one has to do is invoke the new rules and a loan will be automatically modified.

In order to achieve a home loan modification, you will need to meet certain criteria. Thankfully, these criteria are not outrageous or difficult to attain. They are simply put in place in order to avoid a situation where someone who can afford to pay his/her loan opts to take advantage of new modification rules.These rules can help compel a lender to lower interest rates, terms, or monthly payments.

However, to make sure only people truly in need gain from these rules, the borrower must meet certain criteria. This is why it is absolutely paramount to appoint an attorney to prepare proof of said criteria. A qualified lawyer can present the information about your situation in a clear and concise manner that will move the loan modification process along quite efficiently.

For example, one of the most common problems people falling behind on their mortgage payments face is the negative equity of the home. That is, a mortgage is taken out on the home for a very specific figure. Then, due to a crash in the real estate market, the value of the home drops significantly and this occurs prior to the mortgage being completely paid off. This means the borrower will be required to pay more for the home than it is worth.

This is a major reason why so many home foreclosures have spiked in recent years. Many opt to allow their homes to go into foreclosure rather than accept overpaying for a home. This process is further facilitated because lenders feeling very leery about refinancing a mortgage when the value of a home has dropped.

This is why the new mortgage modification rules are so helpful. They provide another option as opposed to foreclosure because they compel the lender to modify and restructure the loan if certain conditions are present. One condition is the aforementioned issue of negative equity. But, a borrower can not simply proclaim negative equity. The information must be clearly proven and supported by facts. A qualified attorney can take over this responsibility for the borrower.

One rule in place is that the borrower must prove that the modification of the loan with alter the borrower’s cash flow in a positive manner. In other words, the borrower’s financial situation must be improved if the modification is in place. This, essentially, ensures the fact the person will be able to make his/her new mortgage payments. Of course, the lender is not going to take the person’s word for it. They will need to see detailed proof presented to them in writing.

This is where an attorney can prove to be significantly helpful. An attorney can present proof in a clear, detailed manner that will allow your modification to be approved. An attorney can do this far more reliably than you could ever do on your own behalf. That is why hiring an attorney to handle such affairs is so helpful, important, and effective.

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