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Exceptional Legal Representation Throughout
Long Island and New York, Since 1993.
We Can Secure Mortgage Loan Modifications and Other Distressed Property Solutions That Have Previously Been Denied
The most common strategy used by our firm to prevent a home in severe mortgage arrears from going into foreclosure is a mortgage modification. Mortgage modifications and other potential retention options are the main goals for homeowners facing significant mortgage difficulties, as they are seeking ways to resolve their issues and keep their homes instead of losing them. By incorporating the mortgage arrears into the remaining principal balance, mortgage modifications aim to eliminate the default amount and prevent foreclosure. Although the restructured loan may be larger, the goal is to make monthly mortgage payments more affordable. This can be achieved in several ways, including lowering the interest rate, extending the loan’s duration, deferring some interest arrears to the end of the loan, or forgiving part of the arrears. A mortgage modification aims to:
Cure the Default – Resolve the mortgage default issue immediately by incorporating the arrears into the loan, allowing the homeowner to resume timely payments.
Affordable Payments – Establish a manageable monthly mortgage payment, ensuring that the homeowner can continue making payments without the risk of default in the future.
Currently, homeowners looking to cure mortgage arrears, stop foreclosure proceedings, and keep their homes are finding mortgage loan modifications to be the most popular and effective solution. However, this section explores various “Retention Options” for properties in default, in case a mortgage modification is not feasible or desired by the borrower. If none of the Retention Options are suitable or desired, we discuss “Non-Retention Options,” or alternatives for debtors who do not wish to retain their distressed property, in the “Debt Negotiations and Settlements” section. Our skilled team enhances your chances of mortgage loan modification approval, thanks to our law firm’s extensive experience. If a mortgage modification is not possible, we will assess and explore other retention alternatives.
In this section, we will explore various “Retention Options” that homeowners facing foreclosure may consider in order to keep their troubled home or other real estate out of foreclosure. We can only evaluate “non-retention” options, which involve negotiating with the lender to eventually surrender the property, after assessing that retention options are unfeasible or undesirable for the homeowner. Non-retention options will be discussed in more detail in the “Debt Negotiation and Settlements” section. Below, we outline several retention options, including Mortgage Modification:
Mortgage Loan Modification – As previously discussed, the goal of a mortgage modification is to cure a default by incorporating mortgage arrears into the loan principal and creating favorable new loan terms that make the monthly mortgage payments manageable. Preferred terms in a modification include a longer loan term, lower interest rate, and the forgiveness or deferral of arrears. There are multiple ways to apply for a mortgage modification:
Bankruptcy Reorganizations (Chapter 13 or Chapter 11 Plans) – Chapter 13 and Chapter 11 bankruptcy reorganizations allow for the restructuring of mortgage arrears under the supervision of the Bankruptcy Court. In Chapter 13, homeowners can choose between two primary plans:
Friendly Sales and Short Sales – A friendly sale is a voluntary sale of the home to a friendly buyer who may allow the homeowner to rent or repurchase the house later. In a short sale, the property is worth less than the mortgage balance, so the homeowner and buyer must negotiate with the lender to accept a lower repayment amount. This option requires the lender’s approval to proceed.
Payoff / Short Payoff – A “payoff” refers to the total amount due on the mortgage, including arrears, taxes, and fees. A “short payoff” is when the homeowner offers less than the full amount due, and the lender agrees to accept the reduced amount as full satisfaction of the mortgage, resolving the foreclosure issue.
Reinstatement / Short Reinstatement – Reinstatement means paying the full amount due to cure the mortgage default and avoid foreclosure. A “short reinstatement” involves negotiating a partial payment of the arrears to reinstate the loan, potentially preventing foreclosure if the lender agrees.
Refinance – Refinancing involves securing a new loan to replace the existing mortgage, bringing the borrower current on payments. This may be done independently or with help from family or friends.
Forbearance – In a forbearance agreement, the borrower promises to cure the arrears over time while continuing regular monthly payments. In exchange, the lender agrees not to foreclose, offering temporary relief while the borrower catches up on overdue payments.
Although the negotiations can be lengthy and challenging, mortgage modifications can assist homeowners in making their mortgages more affordable.
These days, mortgage modification agreements are a great choice for a large number of our clients who are having financial difficulties as a result of mortgage arrears. Many of our clients have fallen behind on their monthly mortgage payments due to the present state of the economy. A customer must demonstrate “hardship” in order to be eligible for a mortgage modification agreement, but they must also demonstrate financial stability in order to continue making mortgage payments when they do receive a possible modification. Numerous elements play a significant role in assisting a client in achieving this kind of resolution, such as their debt to income ratio, the amount of their mortgage arrears, the ratio of their housing payment to total expenses, whether they haveWhether or not they have previously been offered or received a modification; the number of times they have applied for a loan modification; their previous monthly mortgage payment and whether or not a modification allowed for a lower payment; the value of their home relative to the mortgage balance; and the amount of interest charged under the loan, as well as whether or not the terms and rate are high or low in comparison to current market rates.
Even though the economy has significantly improved since then, the Covid-19 lockdowns, furloughs, and layoffs caused a serious setback. In this chaos, numerous To their dismay, homeowners have discovered that they are behind on their mortgage payments, facing foreclosure, or are even in danger of doing so. Although this issue has put many homeowners in a tough financial situation, it has also put pressure on mortgage lenders and the federal and state governments to come up with better solutions. Seeking a mortgage modification or other negotiated solution with one’s mortgage lender is a major component of this kind of solution.
In February 2009, the federal government introduced a voluntary initiative aimed at encouraging mortgage lenders to modify loans for “at-risk homeowners” under the Home Affordable Modification Program (HAMP). Homeowners could apply to their mortgage lender to modify the terms of their loans, including lowering interest rates and extending the loan term to reduce monthly payments. However, mortgage lenders were not required to reduce the principal balance. Originally, legislation included a provision allowing bankruptcy judges to order mortgage modifications if a lender rejected reasonable requests, but this provision was not approved by the Senate. As a result, mortgage lenders retain the right to reject, decline, or simply not respond to loan modification requests, making them completely voluntary.
Although the HAMP program ended on December 31, 2016, it inspired lenders to offer their own “in-house” modification programs. These programs combined mortgage arrears with the remaining principal balance, reduced the interest rate, and extended the loan term, resulting in lower monthly payments. Since the HAMP program’s expiration, borrowers no longer need an initial screening for HAMP eligibility. If they’re ineligible, lenders will consider an in-house modification. Nearly all major lending institutions now offer private bank modifications as the primary alternative.
Many homeowners in Brooklyn and Queens facing difficulty in making mortgage payments are turning to mortgage modification lawyers like the Law Office of Ronald D. Weiss, P.C. for assistance. The mortgage modification process can be complex and often challenging, requiring a dedicated approach to secure the desired results. Homeowners may encounter resistance from mortgage holders and their attorneys, making it essential to invest substantial time and effort in negotiations. While pursuing a mortgage modification or other retention options is a worthwhile goal, it is a time-consuming process that requires strategic planning and attention to detail.
At our office, we take a comprehensive approach to mortgage and foreclosure solutions, exploring various options to assist our clients. We understand that obtaining better mortgage terms is important, even though the process can be fraught with complications. Here’s why our clients benefit from our representation:
If you’re overwhelmed by a problematic mortgage, the Law Firm of Ronald D. Weiss, P.C. is here to represent you in seeking mortgage modifications and other retention options.
For more information about Mortgage Modifications, click here.
To ensure success in securing mortgage modifications or other retention options, it’s crucial to have a qualified professional by your side. We’ll work diligently on your behalf, using applications, letters, phone calls, and supporting documentation to persuade your lender to modify your mortgage loan.
The Law Firm of Ronald D. Weiss, P.C. has facilitated thousands of agreements, helping clients resolve their mortgage arrears. Thanks to our efforts, many clients have been able to avoid foreclosure and keep their homes through mortgage modification agreements, forbearance agreements, payment plans, short sales, deed in lieu agreements, and other settlements. By allowing us to represent you and negotiate on your behalf, we can ensure a timely resolution of the foreclosure process. It is also crucial that the settlement terms are formalized in a legally binding written stipulation to protect your rights.
Our consultations are free, and the advice could be invaluable.
Call us at (631) 570-8742 or email us at weiss@ny-bankruptcy.com for a complimentary appointment to discuss these negotiation and adjustment options in more detail.
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