Foreclosure isn’t filed by the bank immediately after the first payment is missed. The banks all offer a small grace period of approximately five days where they will accept payment. About 15 days from the missed payment the bank will tack on a late fee. At 30 days from the due date the mortgage is officially considered defaulted. Until this point, there isn’t much that the bank can do aside from attempting to collect payment.
Between 30 and 90 days from the missed payment, the lender’s loss mitigation department will try to contact the homeowner to discuss possible alternatives to foreclosure. Avoiding foreclosure is generally to the bank’s advantage.
One of the common foreclosure alternatives is a loan modification. This is a process in which the mortgage is reworked to make payments affordable, by either reducing the principal or adjusting the interest rate, or a combination of the two. This arrangement allows the homeowner to keep their home under new permanent loan terms. Pre-foreclosure modifications are a great way to avoid foreclosure and keep your home.
Being approved for a loan modification is not automatic, the bank thoroughly reviews each application and then makes a decision. Many homeowners become frustrated with the application process because even though they need the financial assistance, they may initially be denied for any number of reasons.
The application consists of a series of financial questions, covering the past couple of years, explanation of financial hardship, and recent financial documents. Many people feel overwhelmed by the types of information being requested, thus they often don’t thoroughly complete it.
Once the application is successfully completed, the applicant must follow through with the bank until it is reviewed. Waiting for the review can often take several months and the bank will need financial statements that are constantly updated. Homeowners have so many other things to worry about on a daily basis, that the application will often fall by the wayside.
We takeover the application process to take the weight off our client’s shoulders. Getting a loan modification approved takes a lot of follow up and detailed record keeping. Most homeowners don’t have the time or discipline needed to get through the bank, but we do. It is our job to deal with the banks on a daily basis and to take detailed notes of every conversation, email and letter that we receive from the bank.
Another advantage is that we have previously dealt with all major banks and numerous small lenders, so we are not surprised by any tricks that the banks attempt.
Our firm is here to help homeowners that are finding it difficult to make mortgage payments, even prior to a foreclosure suit. If you have missed your payment but want to keep your home, schedule an appointment at Graham Legal today. During the free consultation we will review your financial situation and discuss your alternatives.