FAQ

FREQUENTLY ASKED QUESTIONS ABOUT LOAN MODIFICATION

Do I stop making my mortgage payments?

This is one of the most commonly asked questions. As attorneys, we cannot tell you not to pay your mortgage. The only guaranteed way to avoid any negative effect on your credit score and a foreclosure is to pay your mortgage as lender wants you to. But can you afford it? Is your credit score already ruined by maxed out credit cards and missed or late mortgage payments? Is it just the matter of time when and not if you will no longer able to make your current mortgage payments? For people in these situations we often advise that you take a deep breath and stop.

If you pay the bank as agreed, why should they care about your financial condition more than they care about their own pockets? Often banks have an untold policy that if you are not behind on your mortgage for at least 90 days they will not negotiate with you. And success of any negotiation, not only loan modification or short sale is how motivated the other side is.

Not only does your failure to make mortgage payments makes the bank more motivated to negotiate with you, but it also allows you to save your money and to use it better fro your own good. By saving up your payment for several months or more depending on the foreclosure time line in your state, you can not only have enough to put a good plan with your lender, but also have some in the bank for a rainy day or worse case scenario, a rental. Some people even use this saved money to successfully start a new business and make enough money to afford their home again, while we negotiate with the lender to forgive or delay repayment of missed payments. And of course, if you have the money to pay, in most case even if the bank refuses to modify your loan, until the foreclosure is complete, you can always repay the bank what you missed if you saved this money, and almost every lender nowadays will agree to forgive you the penalties for non-timely payment.

Do I need an attorney to modify my loan?

No. You can do mortgage modification yourself. In fact, many services conducted by attorneys can be done without them. For example, you do not have to have an attorney to get a divorce, to buy real estate, to write a will, to file a bankruptcy or even to sue somebody or to defend yourself in court. If you know all rules and procedures, know all your rights, know what forms to fill out and how to do it, and have plenty of time to spend on the phone with your lender, you may be absolutely fine modifying your loan yourself. However, if you do not have hours to spend navigating through your lender’s telephone system, unsure how to present your financial situation in the light most favorable for mortgage modification or already have been turned down by your lender or have been waiting for the lender to call you back for months, you will most likely benefit from professional help.
What documents are needed for a loan modification?
You will need the following documents to support your loan modification package:

• Mortgage Statements
• Homeowners' Association or Condominium Maintenance payment coupon
• Homeowner’s Insurance bill, if it is not included in your mortgage payment
• Hardship Letter (we will help you draft the right letter for the bank but we need to know what caused you to seek loan modification
• Annual Real Estate Tax Assessment
• Correspondence from Lender or Attorney
• Proof of Income: 2 latest pay stubs or 2 months of bank deposits if you are self employed
• Verification of your Assets: 2 months bank account statements or other verification of cash deposits or other money available to make your mortgage payments
• Driver’s License
• Itemized statement of your monthly income and expenses or profit and loss statement for your business if you are self-employed

Why Law Office of Resnick & Associates?

With so many individuals and companies now claiming to be Loan Modification experts, it is important for you to place your family’s future in the hands of experienced professionals. The staff of Law Office of Resnick & Associates consists of attorneys, mortgage specialists, processors, and paralegals with many years of experience representing home owners in the fight for their rights against banks, lenders and unscrupulous mortgage and real estate agents. Attorney Resnick is a Member of the American Institute of Forensic Examiners with years of experience reviewing and underwriting mortgages and is ready to assist you in professional forensic audit of your file.

Do I Qualify for a Loan Modification?

While no lender is obligated to modify your current mortgage, our firm will present your unique situation to your lender to show why it is in the lender’s best interest to modify your current loan program. You are a good candidate for a Loan Modification if you are:

• A home owner in financial distress due to an increase in interest rate or payment on an Adjustable Rate Mortgage or temporary decrease of income from an unforeseen event (illness, layoff, emergency, etc.
• A home owner who doesn’t qualify for a refinance due to limited or no equity in your home, low credit score or being behind on your payments;
• A home owner who was given a fraudulent or illegal loan, such as with overstated income, misrepresented occupation, missing disclosures, misunderstood or misrepresented terms (Negative Amortization or Adjustable Rate instead of Fixed rate mortgage;
• A home owner with a sincere desire to keep their home and who can afford a reasonable payment if given a fresh start.

What To Expect in a Loan Modification?

While it’s impossible to predict the exact outcome of a Loan Modification, your newly modified loan will most likely place you in a much more favorable financial position.
The most common outcomes you can expect from a loan modification:

• Missed payments are forgiven or moved to back end of the loan.
• Monthly payment is reduced to fit your ability to pay.
• High interest rate is reduced to create an affordable payment.
• Adjustable rate is converted to lower fixed-rate loan.
• Lender may forgive part of loan balance to match home’s value.
• Foreclosure process is stopped and lender modifies loan terms!
• Negative amortization loans are converted to non-negative fixed loan.

You keep your home at the price you can afford.

What is included in our mortgage modification service?

We start with review of your financial situation. We then request from your lender and closely examine your loan documents, from your application to all required disclosures to see if the lender made a mistake in originating your mortgage. In most case we find mistakes or non-compliance with various federal laws, such as Real Estate Settlement Procedures Act (RESPA), which strengthens our position when negotiating with the bank.

We then proceed by gathering all documents to be submitted to the bank with your request. We help you write your hardship letter to persuade the lender why it is in their interest to modify your loan. Although we cannot guarantee specific results as each case is unique, we know how to avoid the common problems to get you the best results possible.

We conduct all the negotiations with the lender to achieve the best result for your individual financial goal and accommodate to your unique financial situation.

When the most favorable loan modification agreement is achieved, we present and explain to you the new terms, and make sure that the new paperwork from the bank conforms to what they promised. We conclude the process with making arrangements with your lender for commencement of the new payments.

Additional services

Some of the most commonly requested services available for a separate fee are foreclosure defense and forensic audit of your loan documentation.

We offer foreclosure defense services in Massachusetts and Florida. Our of-counsel attorneys also offer foreclosure defense in other states, such as Virginia, Maryland and District of Columbia. Foreclosure laws differ from state to state and so are the procedures and fees. To learn more about foreclosure defense, contact your foreclosure defense attorneys at Law Office of Resnick & Associates.

Some clients also ask us to conduct a forensic audit of your file. Beware of some non-licensed “loan modificators” who offer to conduct this service for free. Real forensic expertise is expensive and must be done by professionals. Attorney Resnick is a member of the American Institute of Forensic Examiners. If someone offers you this service, ask for a proof of this person’s credentials to call himself a forensic examiner.

FREQUENTLY ASKED QUESTIONS ABOUT A SHORT SALE

Why is a short sale Advantageous to the Lender?

Short sales are more advantageous to a lender than a foreclosure. Lenders are not in the business of managing and owning real estate, and a short sale offers the lender the ability to remove a bad debt from its books and lend the money again. Short sales are less expensive than the foreclosure process. By accepting a short sale, a lender is capping its loss immediately, rather than the expense and uncertainty of foreclosing on a property. Foreclosure can be very expensive to a lender because it could take up to a year or more to take back a property, and in a declining market, the property may be worth substantially less when the bank obtains title than when the homeowner went delinquent. The bank may pay thousands of dollars to the foreclosure attorneys, sit on the property for another year, carrying the cost of property taxes, insurance and maintenance, and then pay real estate commissions to sell the property. Although the lender is likely to go after the homeowner to recuperate the lender’s losses, the lender’s recourse may be limited if, for example, the homeowner discharges this obligation in bankruptcy.

Why is a Short Sale Advantageous to the Seller?

A short sale may be a good alternative to a homeowner who has no interest in keeping the property and does not want to have a negative effect of a foreclosure in his or her credit history:

• The mortgage is marked satisfied at the credit bureau and there is no referenced to a foreclosure
• The seller is not faced with a deficiency judgment as in many foreclosures
• Even if the Seller missed some mortgage payments, the seller’s credit does not suffer as much as in a foreclosure
• Although the Seller is not allowed to benefit or take money home from the short sale, there can be arrangements made with the Buyer under which the Buyer would pay the Seller separately for items that are not considered a part of the property, such as some appliances, furniture or other personal items not permanently fixed to the property.

Why is a Short Sale Advantageous to the Buyer?

A short sale allows the Buyer often to purchase the properties for substantially less that the appraised value of the property. A short sale is often more appealing to the Buyer than purchasing a foreclosed property form the lender because many homeowners who loose their properties to a foreclosure destroy the property being angry over the loss of their asset. Moreover, a short sale allows a Buyer longer time to examine the property which commonly does not have as many outstanding liens against is as a foreclosed property. Unlike a Seller in a short sale transaction who usually has no objections to execute a general warranty deed, the sellers of most foreclosed properties are only willing to issue a special warranty deed where the seller only guarantees the title against any defects that may have occurred when this Seller owned the property. Because most lenders try to sell the property as soon as they acquire the title to it at the foreclosure sale, they only hold the title for a very short time, and the Buyer would acquire the property subject to the liabilities of the previous owner.