In Massachusetts, as of 2022, the foreclosure rate is one in every 4,685 homes. The counties with the highest numbers of foreclosures were Hampden, Franklin, Plymouth, Bristol, and Worcester. If you are struggling to pay your mortgage, or if you are already expecting a foreclosure on your home, you should ask a Massachusetts mortgage modification attorney to help you obtain a loan modification.
Owning a home is traditionally thought of as the American Dream, but for many homeowners in Massachusetts, a mortgage has become more like a nightmare. If you have missed one or two payments, you need reduced interest and a lower monthly payment – as quickly as possible.
How Can You Change Your Mortgage?
Getting approved for reduced interest and a lower monthly payment is often a difficult and lengthy process. The modification of a mortgage loan requires extensive paperwork, a great deal of time, and a process that is slightly different for every servicer and lender.
If you are seeking a mortgage modification to avoid a foreclosure or short sale, you will need reliable advice and guidance from someone who understands the mortgage industry and who routinely helps homeowners to obtain mortgage modifications. You’ll need the help of a skilled Massachusetts foreclosure prevention attorney.
What is Loss Mitigation?
A mortgage servicer may not file for foreclosure until a homeowner is more than 120 days delinquent. A homeowner may apply for loss mitigation during that 120-day period before a foreclosure may begin.
“Loss mitigation” is the phrase that describes mortgage lenders working together with homeowners to avoid foreclosures. A mortgage lender may offer these loss mitigation options:
- forbearance agreements
- repayment plans
- short sales
- deeds in lieu of foreclosure
- mortgage modifications
No law requires a lender to provide loss mitigation, but most lenders offer it because avoiding foreclosures is a way to reduce their own losses. Probably the most popular loss mitigation option is a mortgage loan modification that revises the conditions and terms of the original loan.
What Are Mortgage Loan Modifications?
A mortgage loan modification is an agreement in writing that modifies a promissory note’s terms to make mortgage payments more affordable for a homeowner. A modification usually reduces the interest rate and then extends the term of the loan by reducing the monthly payment amount.
Some lenders may modify a loan by adding the overdue amount to the balance. Investors and lenders usually do not offer a reduction of the principal, however, as a part of a mortgage loan modification.
What Will Your Mortgage Loan Modification Application Require?
To obtain a modification, contact your loan servicer for an application. The application will ask you for a number of details about your expenses, income, and general financial situation. You will also be asked to provide personal financial records and other documents that may include:
- recent paycheck stubs (or a profit and loss statement if you are self-employed)
- tax returns and bank statements
- an income-and-expenses financial worksheet
- a hardship affidavit or statement
Have a Massachusetts mortgage attorney help you with the paperwork and documents to ensure that your application for a mortgage loan modification is accurate, complete, and isn’t delayed or denied due to any mistake or misunderstanding on your end.
Who is Eligible for a Loan Modification?
If you are one or more payments behind on your mortgage, or if a foreclosure is imminent, a Massachusetts foreclosure attorney will help you seek a mortgage loan modification. Generally speaking, to qualify for a loan modification, a homeowner will need to demonstrate that:
- The home is the owner’s primary residence.
- The owner has experienced a financial hardship due to a specific reason: a job loss or a lower-paying job, a divorce, a death in the family, or a long-term illness or injury, for example.
- The owner has sufficient income to afford regular payments, provided that the owner obtains a modification.
Why Should You Avoid Loan Modification Companies?
A loan modification company may charge you a great deal for doing the same work that you could easily do on your own. Loan modification companies function primarily as a go-between and actually do little or nothing to help you obtain a loan modification.
Furthermore, a loan modification company may not respond – for weeks or at all – to a request from the mortgage servicer for more information, and the negligence of loan modification companies is responsible for the denials of the loan modifications sought by some homeowners.
Typically, a loan modification company takes your money and gives you nothing back that you could not achieve on your own. They do not “negotiate” for you because negotiating is not a part of the process. You either meet the requirements for a mortgage modification, or you don’t.
When Should You Contact a Mortgage Modification Attorney?
While loan modification companies are always to be avoided, you may need a mortgage attorney’s help if:
- You’re not sure that a modification will help you avoid foreclosure.
- You have difficulty understanding how to complete the loan modification application.
- The servicer violates any loss mitigation laws or does not act in good faith.
- The servicer simply is not responding to your inquiries.
- The servicer rejects your modification request, and you want to appeal or try again.
In many cases, hiring a Massachusetts mortgage lawyer may make the difference between a homeowner obtaining a mortgage modification and a homeowner losing his or her home to foreclosure.
What Else Should You Know About Mortgage Modifications?
Servicers and lenders are often difficult and aggravating. Frequently, record-keeping is sloppy, key documents are lost, and you have to speak to a different person every time you call. A modification can take months to be approved or denied. If you need one, now is the time to start.
Some Massachusetts homeowners do not receive the modifications they qualify for, and some homeowners do not actually receive a modification even after it has been “approved.” The right attorney can help you avoid these situations.
A Massachusetts mortgage attorney will help you obtain a mortgage modification and will ensure that after you are granted that modification, you actually receive it. Your attorney will provide personalized advice and guide you step-by-step through the loan modification process.
Homeowners – and particularly Massachusetts homeowners who are facing imminent foreclosure – can learn more about mortgage loan modifications by scheduling a consultation as quickly as possible with a Massachusetts mortgage and foreclosure attorney.