When you are facing financial distress, you might explore options like modifying your mortgage loan terms or negotiating with your lender to avoid foreclosure. Foreclosure can have a substantial impact on your current and future credit, not to mention the loss of your home. If you are struggling to make your mortgage payments, a loan modification request might be the best way for you to get your debt under control.

Requesting a loan modification does not always result in an approval. Your request can be denied for a variety of reasons. In many of these cases, it is possible to resubmit the request and potentially have it approved with additional information provided. If you are facing this situation, speak with an experienced bankruptcy attorney about your options.

You Have Insufficient Credit or Income

If you are denied due to having credit issues or not enough money to afford the modified loan terms, you will have to make changes in your daily lifestyle and expenditures. For example, if you have outstanding debt, pay at least some of it. If you cannot afford to pay your entire credit card balance, even paying a portion of it can help you. Similarly, if you cannot show that you have a certain amount of available cash, make changes like selling a vehicle or cutting unnecessary expenses like cable or dining out to save money.

You did not plan to fall behind on your mortgage. In fact, when you bought your home (or refinanced), you probably assumed that you would have more than enough income to make your payments each month. Unfortunately, things do not always go according to plan, and suddenly, you might now be several months behind and facing the possibility of foreclosure.

The good news is that if your lender has not initiated foreclosure proceedings yet, you have a number of options that could keep you in your home. Once the proceedings have begun, you will probably have fewer options, but some almost certainly still exist. Depending on your situation, your best bet may be to seek a mortgage loan modification.

Know Your Options

If you are like most homeowners, speaking with your lender about modifying your mortgage loan may be extremely intimidating. While laws have been passed and programs have been introduced to help struggling homeowners, the reality is that your lender holds most of the cards when it comes to the terms of a modification. There are, however, some ways to help the process go smoothly.

When you default on a loan for a commercial real estate project, it is easy to fear the worst. However, there are often many options for investors looking for assistance with getting a forbearance or a workout agreement with the lender. In order to protect your investment, however, you will need to act quickly.

Alternatives to Bankruptcy

In many parts of the country, the commercial real estate sector has continued to experience its share of challenges, leaving many businesses and investors in a cash crunch and unable to pay their loans. Some people mistakenly believe that the only way out of a default or distressed loan is bankruptcy. However, there are often other options available. 

With the help of a knowledgeable lawyer, you might be able to negotiate an agreement with the lender that avoids a foreclosure and bankruptcy. Lenders often do not want to deal with a foreclosure any more than you do. In fact, if you will eventually be able to get your loan caught up, it will usually make the most financial sense for your lender to work out some type of arrangement with you. With careful representation, you may be able to secure a forbearance agreement with the lender that gives you more time to get current on the loan.

Are you behind on your mortgage? If so, are you getting to the point where you are worried about the possibility of foreclosure? When you are behind on your mortgage payments, things can spiral out of your control very quickly. It is important to realize, however, that you may have options that could allow you to keep your home and to get back in good standing with your lender. One of these options is a loan modification, and a skilled Lake County lawyer can help you apply.

Your Loan Will Not Be Modified If You Do Not Apply

A loan modification, put simply, is an amendment to the terms of your loan so that you can get caught up and back on track with your mortgage. There are different types of modifications available, such as an extension of the loan’s term to reduce monthly payments, interest rate adjustment, and the capitalization of your missed payments. While each type of loan modification is different, they have one thing in common: you cannot get a modification unless you apply for one.

Unfortunately, getting your modification application complete and in front of decision-makers at your lender is not always easy. The individuals who answer the phone when you call are not always clear about what your application package needs to include or whether they have received everything you sent them. The key to resolving the situation is getting the application requirements in writing, sending your application package to your lender—using mail, fax, and email, if necessary—and following up to ensure it is received.

After a software error that occurred in Wells Fargo's system sometime between April 2010 and October 2015, a settlement has finally been reached between the company and some 6,000 mortgage holders who were impacted by the error. The software error caused customers to be incorrectly denied modifications on their loans and repayment plans when they actually should have qualified. In several cases, foreclosure proceedings began after the denials.

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