Banks and loan servicers are difficult to deal with when negotiating a home loan modification. Loan servicers have even less incentive to approve a modification because they can make more money charging your lender foreclosure servicing fees. Lenders are overwhelmed with modification applications and cannot get to all of them fast enough because they are short staffed. Without professional assistance, it may take you twice as long to obtain a modification, or you may get turned down because you did not turn in the right paperwork or you are missing important financial information. Hiring a modification/foreclosure defense attorney gives you more negotiating power because the attorney is skilled at negotiating loan modifications, understands the process and is familiar with the required documentation. The attorney can also advise you of other options that might work for you besides modification.
Forensic Loan Review
The attorney will review your loan documents to determine if your lender violated any lending laws or committed predatory loan practices against you at time they issued your original loan. Lenders must comply with the following federal laws:
- Real Estate Settlement Procedures Act (RESPA). Your lender must disclose all fees regarding your loan.
- Truth in Lending Act (TILA). Your lender must disclose loan terms and costs to you.
- Home Ownership and Equity Protection Act (HOEPA). This law pertains to high cost refinance loans.
If your lender violated these laws, you may be able to rescind your loan and obtain damages. Your attorney can use this as leverage in obtaining your modification to get you better loan terms. Because lenders are subject to fines and penalties for breaking these laws, they would rather negotiate a modification with you.
Stay in Your Home and Save Money
While your attorney is negotiating your home loan modification, you can stay in your home and probably not have to pay your monthly mortgage payment. This way you can save money. Many people think that if they miss more than a few mortgage payments, their lender can evict them. Your lender has to go through formal foreclosure proceedings and give you notice of a foreclosure sale before you have to leave your home. This process takes many months.
Hiring an Attorney
While you could try and negotiate your home loan modification directly with your lender, most people are not experienced enough to do this, and their success rate is usually much lower than if they would have hired a modification attorney. The attorney is an expert at using foreclosure defenses and loan modification tactics to get your modification approved.
