Many clients don’t understand why their lender would consider modifying their mortgage loan to more favorable terms to them. In short, when dealing with distressed homeowners, lenders essentially have the following choices:
- Loan modification. The lender and the borrower agree to modify the terms of the loan, including lowering the interest rate, waiving fees or extending the term for repayment.
- Foreclosure. The lender files a lawsuit to obtain judgment against the borrower, and then must proceed to a sheriff’s sale to sell the house.
- Forbearance. Forbearance is an agreement between the lender and the borrower to delay a foreclosure. The lender agrees to “forbear” from its collection efforts if the borrower can catch-up to his payment schedule in a certain time.
- Deed in lieu. The borrower voluntarily turns over the house to the lender in satisfaction of the loan.
- Short sale. The lender agrees that the homeowner can sell the home for less than what is owed under the mortgage loan.
The lenders make each of these options very difficult for the homeowner. An experienced bankruptcy attorney can help guide you through the maze of options.
If you are interested in learning more about modifying your mortgage loan, contact Levitt & Slafkes, P.C., to schedule an appointment.
If you would like to make your home more affordable, now is the time to schedule a free initial consultation with a New Jersey loan modification lawyer at Levitt & Slafkes, P.C. Contact our attorneys onlineby filling out the form or by calling 973-323-2953 to schedule a free initial consultation.