If you are an Illinois homeowner and you are interested in a loan modification, you should speak to your lender to find out what programs you may qualify for. Loan modifications have been helping Illinois homeowners who are in default or about to default on their mortgages keep their homes. With a modification, your lender agrees to modify your existing loan by lowering your interest rate, giving you a fixed rate mortgage and adding any default amounts to the back end of your mortgage. You should also ask your lender if they can reduce your principal. The best loan modifications are when your lender permanently modifies your loan and/or reduces your principal. Since loan modifications are complicated, it is also a good idea to consult with a loan modification attorney for advice.
Modification to Stop Illinois Foreclosure
Even if your lender has instituted a judicial foreclosure proceeding, you can still stop the foreclosure by negotiating a mortgage loan modification with your lender. Once you and your lender start the modification process, your lender will realize your are serious about keeping your home, and will stop the foreclosure procedure after your modification has been approved.
Government Programs to Help
One of the best modification programs is the government’s Home Affordable Modification Program (HAMP). HAMP requires that both you and your lender voluntarily participate. To find out if you qualify for the Program, ask your lender or check with your attorney. HAMP eligibility requirements include:
- All loans must have originated on or before January 1, 2009
- The property must be owner occupied primary residence 1 -4 units
- Your current loan payment must be greater than 31% of gross income
- You must be able to document your financial hardship
- The unpaid principal balance on your loan must be equal or less than: $729,750 for a single-family home, 2 units $934,200, 3 units, $1,129,250, 4 units $1,403.400
- Unemployed borrowers who are currently in a HAMP program and have not missed three consecutive payments or who were previously determined ineligible are eligible for the UP program. You may be offered a forbearance, short sale or deed in lieu of foreclosure under the government‘s Home Affordable Foreclosures Alternative Program (HAFA) as well. Payments may also be suspended for three to six months.
Using an Attorney
You should use a real estate mortgage modification attorney to help you obtain your modification. The attorney will review your loan documents to see if your lender committed any violations under the Real Estate Settlement Procedures Act (RESPA) or the Truth in Lending Act (TILA), and use this information as a bargaining chip with your lender to obtain your modification. You will have a much better chance of obtaining a modification if you use an attorney to help you because the attorney is experienced at negotiating modifications on a regular basis.
