Can a Middlesex County Loan Modification Stop Foreclosure?
If you are facing foreclosure in Middlesex County, NJ, the best way to get back on track with your payments and avoid a sheriff sale is to submit a complete loan modification application with the help of a Middlesex County Loan Modification Attorney. At the Law Firm of Ira J. Metrick, we offer aggressive loan modification representation. We have the resources to:
- Tell our clients whether they will qualify for a loan modification.
- Give an estimate of what the modified payments would be.
We do not apply for a modification unless we have advised the client of what payment terms they can expect. We have the resources to research the specific Trust, Investor or Servicer and identify the specific Modification programs that may be available to our clients. Now that HAMP is no longer in existence, it is more important than ever to understand that your loan may be reviewed for a Servicer’s proprietary loan modifications and not any published modification.
What is a Loan Modification?
In New Jersey, a Loan Modification is a change made to the terms of an existing mortgage. Most commonly, modifications occur after a Borrower has fallen behind and the Lender has stopped accepting payments. The modification from the lender sets a new monthly payment amount and permits the Borrower to start making monthly payments and avoid Foreclosure.
Modifications do not always lower the monthly payments. If the total amount owed is more than the original loan amount, or if current interest rates are higher than the existing interest rate, the modification payment can be more than the original payment amount.
A Loan Modification is the best way for a homeowner to save their home after they have fallen behind on their mortgage payments.
Which Type of Loan Modification Am I Eligible For?
The type of loan modification available to you will depend upon the investor and servicer for your loan. Some of the most common modifications are:
- Principal Reduction Loan Modification – Also called principal forgiveness, this is the most preferable form of loan modification, but also the least common. A principal reduction loan modification permanently removes or ‘forgives’ a certain amount of the total amount owed to the lender and provides a new smaller monthly payment based on the new total. Some lenders who currently review borrowers for Principal Reduction Modifications are:
- Principal Forbearance – These modifications are more common and provide great assistance to homeowners. With a forbearance, a portion of the amount owed is simply ignored for purposes of calculating your monthly payment. You would only have to pay that amount if you sell or refinance the property, or reach the end of the loan term. (For example: with FHA loans, there is a program that permits them to “forbear” up to 30% of the amount due.)
- Interest Rate Reduction Loan Modification – Your lender may agree to lower the interest rate on your loan to help reduce your monthly payments.
- Loan Term Extension – Your lender may lower your monthly payments by extending the total life of your loan. Many lenders will offer a modification with up to a new 40 year (480 month term).
- Late Fee Forgiveness – Your lender may agree to forgive any additional late fees you have accrued due to missed payments.
- Capitalization of Arrears – This is the most common modification. With Capitalization, all of the missed payments and fees are simply added to the end of the loan, and the lender may extend the term of the loan and reduce on all of the factors. It is possible that the modified payment will actually be higher than the original monthly payment.
If you are making payments on a loan modification, or your lender has confirmed that your application is complete and it is being reviewed:
- Your lender cannot file a foreclosure complaint.
- Your lender cannot apply for a Final Judgment of foreclosure.
- Your lender cannot pursue a sheriff sale.
These are violations of federal law. If your lender has pursued any of these actions,
we can help you.
What Loan Servicers Have You Obtained Loan Modifications For Your Clients From?
Some of the most common modification violations made by these servicers occur after they have violated one (or several) of the following regulations:
- Issue a decision within 30 business days of receipt of a complete application for a Loan Modification, Short Sale, or Deed in Lieu of Foreclosure.
- Advise the borrower within 5 business days after receipt of an application, if there are any additional documents needed.
- Stop any and all action in a foreclosure, while a complete application is being reviewed.
- Provide information properly requested about ownership of note and mortgage under TILA within 10 business days.
- Provide information properly requested about loan payments, loan history, and other loan information within 30 business days.
- Provide payoff or reinstatement figures within 7 business days of receipt of written request.
If a servicer violates these regulations, there can be liability.
Contact a Middlesex County Loan Modification Attorney
Ira J. Metrick is an experienced Middlesex County Loan Modification Attorney who can help you understand your options. We can determine whether you are eligible for a loan modification, which types of loan modifications to apply for, and what the new payment terms will be. Contact us today to discuss your situation.