A financial crisis can make it difficult to afford your mortgage payments. A slight change in income or a new expense could make your household budget stretch to the limit. If you miss one mortgage payment, it can be tough to catch up.
Many homeowners that miss a mortgage payment intend to catch up when their finances improve, but their finances never improve or they become so far behind it is impossible to catch up all the payments. Before they know it, they owe thousands of dollars in payments, late fees, and other fees. The mortgage company wants the entire overdue balance immediately, or it will begin foreclosure proceedings.
A mortgage loan modification may be a way to resolve the problem and keep your home. However, mortgage modifications can be complicated. Some mortgage companies are not willing to modify the terms of a loan. You may want to consult with an Anthem loan modification lawyer about your situation. An attorney can explain the modification process, guide you through the process, and help avoid mistakes that might result in delays or denials.
What is a Loan Modification?
When you received your mortgage loan, the loan agreement contained specific terms about the loan, such as the interest rate, term, principal amount, and monthly payments. A loan modification may change one or more terms of the original loan agreement.
For example, your mortgage company may agree to lower your interest rate and extend the term of the loan to reduce your mortgage payments so that you can afford to keep the home. Some mortgage companies may forgive part of the arrearage (past due payments) or add the payments to the end of the loan.
Mortgage companies have internal policies and procedures for handling mortgage modification requests. The companies are not required to modify the terms of a loan or work with a customer to resolve late payments.
Filing Chapter 13 if a Loan Modification is Not Possible
Many homeowners work diligently to jump through every hoop and over every hurdle to satisfy the mortgage company’s requests. They provide all documents and information requested, but the mortgage company continues to request additional documentation and information. During the loan modification process, the lender may be working on a foreclosure in case the modification falls through. This situation can be very frustrating for a homeowner.
If a loan modification is not possible, a homeowner may want to explore bankruptcy options to prevent foreclosure.
Filing Chapter 13 may be an option to prevent foreclosure. When you file a Chapter 13 bankruptcy case, the automatic stay prevents the mortgage company from proceeding with a foreclosure without court approval.
As long as you resume your regular monthly payment to the mortgage company and you are working to confirm a plan that repays the mortgage arrearage, the mortgage company should not be able to modify the automatic stay.
The Chapter 13 plan includes the mortgage arrearage. Because you can spread out the past due amount over 60 months, filing a Chapter 13 case may give you the debt relief you need to keep your home.
Contact Our Anthem Loan Modification Attorneys for More Information About Loan Modifications and Bankruptcy
If you are working with your mortgage company to modify your loan and hitting a dead-end, contact our Anthem loan modification lawyers for help. We provide legal advice, guidance, and support throughout the loan modification process.
Call Allegiant Law Group today at 602-562-1000 to schedule a free consultation with an Anthem loan modification attorney.