When facing the prospect of losing their homes to foreclosure, many homeowners across Washington State desperately fasten upon almost any solution that promises to help them avoid foreclosure. A loan modification that changes one or more of the mortgage terms and makes payments more manageable for the debtor is a tempting option.
Nevertheless, research shows that many people who obtain loan modifications wind up defaulting on their loan later on. In addition, unfortunately, in recent years, scam artists have been taking advantage of mortgage debtors, promising that they will be able to save their homes, but all too often, leaving the borrower worse off. A bankruptcy attorney can help counsel you regarding loan modifications and how to locate a legitimate provider of this tool that may help you avoid foreclosure.
Loan modification basics
A loan modification is a permanent change in one or more mortgage terms, permitting the loan to be reinstated and offers the borrower a new, reduced monthly payment that he or she can afford. The federal Home Affordable Modification Program allows borrowers to modify their home loans if they fulfill the following requirements:
- Outstanding Mortgage Debt Less Than or Equal to:
- $729,750 for a single-family home
- $934,200 for a 2-unit property
- $1,129,250 for a 3-unit property
- $1,403,400 for a 4-unit property
- Experiencing Financial Hardship
- Mortgage Issued Before January 1, 2009
In addition, there are several private home loan modification programs that are intended to help borrowers achieve a more manageable monthly payment.
How can I protect myself from fraudulent modification providers?
There are several steps you can take to protect yourself from fraudulent loan modification providers. First, consult with an attorney to approach your bank directly in order to try to negotiate a modification. If you are considering a loan modification with a third-party broker or brokerage company, be sure to verify they are licensed in compliance with Washington’s Mortgage Broker Practices Act and the Consumer Loan Act. If the broker or company is licensed in another state, be sure to verify this with that state’s regulatory offices. Protect your financial assets by refusing any requests by a loan modification company to have direct access to your bank accounts or credit cards. As with any legal transaction, make sure to do your research and compare options, as well as review all paperwork prior to signing any documentation.
BK Lawyers LLC bankruptcy attorneys understand that the prospect of losing your home can be overwhelming. We are committed to helping you explore legitimate loan modification options that may help you keep your home. Contact us to schedule your free initial consultation to discuss loan modification possibilities.