When a homeowner falls behind on mortgage payments, foreclosure is the worst possible outcome.  A foreclosure involves the bank taking your home and forcing its sale. The foreclosure will damage your credit for as long as 10 years after it occurs and the lender could get a deficiency judgment and try to collect money from you if the house doesn’t sell for enough to repay the mortgage.
Avoiding foreclosure should always be the goal of any homeowner. Mortgage modifications are one possible way that a homeowner may be able to avoid having a home foreclosed on. An experienced foreclosure lawyer at the Law Office of Ronald D. Weiss, P.C. can help you to explore options for modifying your mortgage in order to avoid having your house foreclosed on.
Foreclosure vs. Mortgage Modification
When your home is foreclosed on, you have to vacate the house and you will have the judgment of foreclosure on your credit report, as well as a possible deficiency judgment. Any money you paid into the home is likely to be lost, unless the home sells for a lot more than the mortgage was worth and you are paid the difference.
With mortgage modification, on the other hand, the terms of your mortgage loan are changed so you are able to keep the house. You avoid the damage to your credit, you don’t lose your home or your investment and you can ideally stay in the house and keep current on payments.
Mortgage modifications can take different forms, including reducing your payments to a percentage of your income and extending the repayment period. In some cases, you may also be able to refinance into a lower interest rate or a longer repayment period to lower your payments, or you may be able to actually have your balance lowered on the mortgage. The Home Affordable Modification Program (HAMP) provides incentives from the government for lenders to modify mortgages and establishes a number of different modification options that homeowners can take advantage of. Individual lenders may also have their own options for modifying mortgages.
The problem, of course, is that you have to qualify for a mortgage modification. You may need to try to do this even as the bank is moving forward on trying to foreclose on your home. An experienced attorney can help you to negotiate a modification, and can assist you in finding ways to slow down the foreclosure so you have more time to try to work out a deal with your lender. Bankruptcy may be one option for those who want to slow down foreclosure to find time to work on a mortgage modification, and it can also make it easier for you to afford your mortgage payments by discharging other debt.
For help with bankruptcy, mortgage modification or foreclosure issues, contact Ronald D. Weiss, P.C. today to speak with an experienced legal professional.