A deal brokered with mortgage lenders by California Gov. Arnold Schwarzenegger resulted in 136,785 mortgage loan modifications in 2008, the Sacramento Bee reported March 10. The loan workouts were reported by lenders who voluntarily agreed to increase their efforts to change home loans, in an effort to keep more Californians out of foreclosure. The governor said he was pleased with the number of modifications they reported, which was higher than his 100,000-workout goal. California still saw many more foreclosures in 2008 -- 237,131 -- than workouts, but the Bee said loan modifications gained on foreclosures by the end of the year, perhaps showing lenders' increased willingness to negotiate.
However, as Whittier mortgage loan modification attorneys, we can see that not all of the news here is good. The article says 58% of the loan workouts were cuts to homeowners' interest rates, while other heavily used tools were short sales and temporary forbearances. Fewer than 1% of the workouts involved reductions in the loans' principal, which experts believe is an essential tool for keeping substantial amounts of homeowners in their homes. Nearly a third of California homeowners are underwater, which means they owe more than their homes are worth, and can't refinance. Without reductions in principal, they may be truly unable to keep up payments.
At Howard Law, our La Mirada mortgage loan modification practice focuses on helping clients negotiate a meaningful loan workout that lowers their payments to an amount that keeps them out of foreclosure. Agreeing on a lowered interest rate is one of the tools in our arsenal -- but if the lower interest rate doesn't result in a substantially lower payment, it's not worth much. That's why we argue strongly for principal reductions in situations where they're appropriate, including many cases of "exotic" or subprime mortgages.
Howard Law LLP has had substantial success ending the most damaging provisions of adjustable-rate and negative amortization mortgages. In addition to negotiating for lowered principal and lower interest rates, our Tustin loan modification lawyers can help you extend the life of your loan or change the type of loan you have. We also file Orange County predatory lending lawsuits on behalf of clients who have been illegally trapped into mortgages they can't afford. If you're ready to talk to a lawyer about how you can fight for your home, we would like to help. To set up a free, confidential consultation today, please contact us online or call us toll-free at 1-800-872-5925.