Last week we received several offers of Loan Modification from different banks. Some are in compliance with the Obama plan while others are not. In one offer, we received a reduction in payment of about $1000 from the original mortgage payment. They based the new monthly payment on the gross income of the spouses multiplied by 31%. The resulting mortgage payment of $2475 includes property tax and home insurance of $850.
The offer from another lender is a choice of three monthly payments which reduced the interest rate from 8.94% to 4% resulting in a reduction in monthly payment from $4770 to $2000 or a reduction of $2770. The lender is not a participant in the Obama plan.
Someone consulted me showing me a loan modification prepared by a foreclosure consultant that increased his monthly payment by $200. He asked me if he should sign it and I said no way. The purpose of loan modification is to reduce monthly payment and yet this one will increase your payment. I told him that he should go back to the lender and ask for the loan modification that follows the Obama plan.
Question: If the lender’s first offer of loan modification is a small reduction in monthly payment do I have to accept it?
Answer: No. If you can explain to the bank that you cannot afford the monthly payment they will make a second or third offer. Loan modification is negotiation. The bank will always offer you small amount of reduction if you do not know how to negotiate. However, you need an attorney whom you can talk to if you are near foreclosure because the bank may foreclose you property and you may not know your rights. You need the necessary tools to negotiate such as a finding of predatory lending based on loan audit.
Question: What is the best time that I should contact an attorney?
Answer: The best time to contact an attorney is when you start the loan modification process. You can get more reduction if you negotiate early because you are not pressured for time to accept their first or second offer. In addition you have more time to secure an audit of the loan so that you can bargain for reduction in principal if there are federal law violations and predatory lending. You should be able to see your attorney and talk directly to him or her about your case because your home, your most precious asset, is at stake. Your attorney should communicate with you and be reachable when you have questions.
Question: May I contact an attorney based Modification Company about the notice of default?
Answer: An attorney based modification company does not have the ability to immediately act on your legal problem because they will have to consult the matter to their contracted attorney. In a Law Office you can speak face to face directly and immediately to an attorney who can advise you of your options.
Question: Will filing of Chapter 13 bankruptcy stop foreclosure?
Answer: Chapter 13 bankruptcy will temporarily stop foreclosure. Once the debtor is discharged, the lender will proceed with the foreclosure if the debtor is still late on his monthly payments.
Question: Can a homeowner apply for loan modification after a debtor is discharged in Chapter 13 bankruptcy?
Answer: Yes. However, it is better to apply for loan modification before filing Chapter 13 bankruptcy because you have a better chance of getting better terms in modifying your loan. Once you filed for bankruptcy and still you cannot pay your mortgage after your discharge, you have lesser chance of getting the best terms of modification.
Note: This is not a legal advice. You need to talk to an attorney about your case. Our office offer FREE initial consultation on Loan Modification only.
Crispin Caday Lozano is an active member of the State Bar of California since 1999. He graduated Juris Doctor (Law Degree) from Western State University School of Law in Fullerton, California. He is a licensed Real Estate Broker #01297744 since October 2001. He is also a Certified Public Accountant and a Bachelor of Business Administration Cum Laude graduate. His offices are located at 17057 Bellflower Blvd. Suite 205, Bellflower, CA 90706 and 1290 B Street, Suite 205, Hayward, California 94541 and at 777 N. First St., Suite 333, San Jose, CA 95112. You can contact him at telephone (562) 461-1355 and (510) 538-7188.
The offer from another lender is a choice of three monthly payments which reduced the interest rate from 8.94% to 4% resulting in a reduction in monthly payment from $4770 to $2000 or a reduction of $2770. The lender is not a participant in the Obama plan.
Someone consulted me showing me a loan modification prepared by a foreclosure consultant that increased his monthly payment by $200. He asked me if he should sign it and I said no way. The purpose of loan modification is to reduce monthly payment and yet this one will increase your payment. I told him that he should go back to the lender and ask for the loan modification that follows the Obama plan.
Question: If the lender’s first offer of loan modification is a small reduction in monthly payment do I have to accept it?
Answer: No. If you can explain to the bank that you cannot afford the monthly payment they will make a second or third offer. Loan modification is negotiation. The bank will always offer you small amount of reduction if you do not know how to negotiate. However, you need an attorney whom you can talk to if you are near foreclosure because the bank may foreclose you property and you may not know your rights. You need the necessary tools to negotiate such as a finding of predatory lending based on loan audit.
Question: What is the best time that I should contact an attorney?
Answer: The best time to contact an attorney is when you start the loan modification process. You can get more reduction if you negotiate early because you are not pressured for time to accept their first or second offer. In addition you have more time to secure an audit of the loan so that you can bargain for reduction in principal if there are federal law violations and predatory lending. You should be able to see your attorney and talk directly to him or her about your case because your home, your most precious asset, is at stake. Your attorney should communicate with you and be reachable when you have questions.
Question: May I contact an attorney based Modification Company about the notice of default?
Answer: An attorney based modification company does not have the ability to immediately act on your legal problem because they will have to consult the matter to their contracted attorney. In a Law Office you can speak face to face directly and immediately to an attorney who can advise you of your options.
Question: Will filing of Chapter 13 bankruptcy stop foreclosure?
Answer: Chapter 13 bankruptcy will temporarily stop foreclosure. Once the debtor is discharged, the lender will proceed with the foreclosure if the debtor is still late on his monthly payments.
Question: Can a homeowner apply for loan modification after a debtor is discharged in Chapter 13 bankruptcy?
Answer: Yes. However, it is better to apply for loan modification before filing Chapter 13 bankruptcy because you have a better chance of getting better terms in modifying your loan. Once you filed for bankruptcy and still you cannot pay your mortgage after your discharge, you have lesser chance of getting the best terms of modification.
Note: This is not a legal advice. You need to talk to an attorney about your case. Our office offer FREE initial consultation on Loan Modification only.
Crispin Caday Lozano is an active member of the State Bar of California since 1999. He graduated Juris Doctor (Law Degree) from Western State University School of Law in Fullerton, California. He is a licensed Real Estate Broker #01297744 since October 2001. He is also a Certified Public Accountant and a Bachelor of Business Administration Cum Laude graduate. His offices are located at 17057 Bellflower Blvd. Suite 205, Bellflower, CA 90706 and 1290 B Street, Suite 205, Hayward, California 94541 and at 777 N. First St., Suite 333, San Jose, CA 95112. You can contact him at telephone (562) 461-1355 and (510) 538-7188.
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