Mortgage loan modifications remain a hot topic in the news lately, thanks in part to President Obama's housing plan. Unfortunately, one of the biggest problems we've run across as Garden Grove loan modification lawyers is that banks frequently won't even discuss changes to a mortgage loan until after the homeowner is behind on payments. This is extremely frustrating for clients who know they soon won't be able to pay and would like to avoid an interruption in payments and the corresponding hit to their credit.
That's the situation for homeowner Debbie Jameson of Dublin, New Hampshire, according to an article MSNBC picked up from the Manchester Union-Leader Feb. 21. Jameson took out an adjustable-rate mortgage five years ago, in part because she didn't qualify for a fixed-rate mortgage. At the time, she said, she was told she could refinance when she had at least 20% equity in her home. Thanks to the economic downturn, she wasn't able to build that much equity, and her income has also dropped. Knowing her payments would jump by $300 this April, she has been trying to modify her mortgage without luck, first through her mortgage loan servicer and then through the federal Hope for Homeowners program. She hopes Obama's new Homeowner Affordability and Stability Plan will bring her better luck.
The "mortgage meltdown" has changed lenders' attitudes somewhat, as they face more and more expensive foreclosures. But for the most part, lenders still don't want to discuss a loan workout with homeowners like Jameson who are still in the black. That's partly because they may not believe that the borrowers are really in trouble -- after all, they're still making their payments! Another problem arises when the mortgage has been bundled and sold as an investment, giving investors a stake in the value of the loan. Nervous about losing money, they may threaten the mortgage servicer with lawsuits, or the mortgage servicer may need investor permission it cannot get. The Obama plan may change this by splitting the costs and adding extra protections against default, giving lenders a financial incentive to renegotiate.
At Howard Law LLP, our Southern California mortgage loan modification lawyers have had substantial success negotiating loan modifications for clients with unconventional mortgages like Jameson's, including adjustable-rate mortgages and balloon mortgages. We represent homeowners in negotiations with their lenders to save their homes at all stages of the foreclosure process. We also counsel clients who are considering bankruptcy to help them control a large amount of debt, including mortgage debt. And we offer free, confidential consultations, so speaking to us costs nothing but time. If you're in a bind like Jameson's and you're ready to explore your legal options, you can contact us online or reach us toll-free at 1-800872-5925.