Question: A few years ago, our mortgage lender approved a loan modification after we had fallen behind due to a job loss. Recently, we had another issue and had to stop payments again. Now we are in foreclosure. Is there any hope to save our home?
Answer: Yes. Statistically, around a half of the people who have received a loan modification will fall behind again. But the banks are still willing to work with owners and give them a second or third shot at saving the family home. As with any loan modification, the deal must make sense for both sides. The modified payments should be no more than 31 percent of your gross income, property taxes and insurance. And you will need a good explanation for why you defaulted on the original modification and why your situation is better now. You’ll want to approach the bank with all of your financial information in hand and immediately respond to its requests, even if it means faxing the same document multiple times.
Don’t get frustrated or emotional about the delays and hoops you need to jump through and continue to push for the modification, even after repeated denials. Also, because you were served with a foreclosure lawsuit, you’ll need to properly respond to that, so contact a lawyer about your legal rights. Defending the foreclosure while pursuing a loan modification will give you the best chance to keep your home.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter GarySingerLaw.
The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.