If you are falling behind on mortgage payments and find yourself facing foreclosure, a loan modification is one of the most powerful tools at your disposal for stopping the foreclosure in its tracks. However, that doesn’t mean you should blindly put all your eggs in this one basket. You should take time to learn about the advantages and drawbacks of a loan modification, as well as what applying for one entails. A Miami foreclosure defense attorney can offer you guidance for your unique situation and inform you of everything you need to know to get the outcome you desire.
To get you started, here are five of the most essential things to know before starting the process for requesting a loan modification in Florida.
1. You May Not Qualify
The requirements for obtaining a loan modification will vary depending on the lender, and it’s important that you understand that you may not get approved. That said, having an experienced attorney on your side can increase your chances of getting the loan modification you desire.
2. Not All Loan Modifications Are Equal
In the event that you are approved for the loan modification, there is a good chance the offer will not be quite what you hoped for. Though the modification can be an excellent way for you to avoid foreclosure, its terms will always be more favorable for the lender. Furthermore, if you are targeted by a fraudulent company looking to scam you out of your hard-earned money during your time of need, the modification you are presented with is likely to make your situation even worse. For this reason, it is always advisable to have an attorney review the contract terms before signing anything.
3. There May Be Downsides
In addition to potentially unfavorable terms, a loan modification could also come with other repercussions you should be aware of. For instance, some lenders may notify credit reporting agencies of the modification, allowing that information to show up on your credit report. That said, this would be far less detrimental to your credit than a foreclosure, so pursuing the modification is likely to still be advisable.
4. The Foreclosure Process Could Continue
Even in the event that the bank promises you a loan modification, there is no guarantee it won’t simultaneously pursue foreclosure against you. Unfortunately, most debtors do not realize this until it is too late. Furthermore, the loan modification isn’t necessarily permanent. Most modifications have a three-month trial period. At the conclusion of this timeframe, the bank can decide to rescind its offer and proceed with foreclosure, regardless of whether or not you kept up your end of the bargain.
5. Enlisting an Attorney is Advisable
With all this in mind, it is important that you understand the benefit of having a knowledgeable attorney see you through the application process. Your attorney’s experience with the paperwork and familiarity with the somewhat confusing legal lingo will make him/her invaluable to you. Additionally, your lawyer can help you formulate a counter-offer to present should you get rejected, as well as advise you on whether a loan modification is the right choice for you in the first place. Most importantly, an attorney will ensure your rights are protected and keep the bank from pursuing foreclosure while you await a decision on your loan modification approval.
Interested in finding out whether a loan modification is the right solution to your mortgage troubles? Schedule a free consultation with a Miami foreclosure defense attorney at Graham Legal today! Together, we can devise a plan of action that will get you the best possible results.