Tips For Using A Loan Modification To Avoid Foreclosure

Law Blog

Filing for bankruptcy is one method people use to stop a foreclosure from occurring, but this is not always the best option. After receiving the foreclosure documents from your lender, you may want to visit an attorney that specializes in foreclosure law. This attorney might be able to recommend using a loan modification program to put the foreclosure to a halt. Here are several things you should understand before using this option. 

Getting Approved For A Loan Modification Takes Time And Effort

A loan modification allows you to change the terms of your loan, and it is something your lender must be willing to do. This process is not simple by any means. It will take time and work, but this type of program is much easier if you have a lawyer working for you. Your lawyer will tell you exactly what documents are needed and what you must do. He or she will take care of communicating with the lender throughout the process, and you will simply have to do what the lawyer tells you.

If the paperwork is not filled out accurately or if there are things missing from the application, the lender may deny the request. With the help of an attorney, you will have a higher chance of getting approved for the modification. If it gets approved, you will not lose your home to foreclosure at this time.

You Can Apply More Than Once

If you have already tried to get a loan modification and have been denied, you are free to apply again. If you tried to do this on your own the first time, hire a lawyer the next time. When you apply the second time around, make sure you know why the lender denied your request the first time. One reason lenders deny these plans is for lack of income. If this was the reason your modification was denied, get a second job to add income to your budget, or try offering a different set of terms that would result in a lower monthly payment.

Your Hardship Letter Plays A Big Role In The Lender's Decision

One advantage of having a lawyer during this time is that he or she can help you write your letter of hardship. This letter is a necessity for anyone that applies for a modification, and it can help or hinder a person's ability to get approved. This letter must clearly state why you fell behind on your payments, and your odds of getting approved will be much higher if you went through a major problem in life. This could be a divorce, the loss of a spouse, or a loss of a job. Foreclosure attorneys are highly experienced with writing letters like these.   

If you want to avoid losing your home after receiving foreclosure documents, you should visit an attorney as soon as possible. The process of getting a loan modification takes time, and you should try to begin the process as soon as you can.


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