One very effective way of avoiding foreclosure that does not involve a homeowner having to file bankruptcy is a modification of the homeowner's existing mortgage. Loan modification programs allow certain people who are struggling to lower their monthly mortgage payments and keep their homes.
While lenders need to approve of any modifications to the original terms of loans, they are usually inclined to do so because it is in their best financial interests to have someone making monthly payments as opposed to owning property and selling it at a loss. The mortgage modification process, however, can be very stressful.
Lawyer for Mortgage Modifications in Cincinnati, OH
If you are hoping to modify your mortgage to possibly avoid foreclosure in Northern Kentucky or Southern Ohio, it is in your best interest to make sure that you have knowledgeable legal representation. Steiden Law Offices assists clients with all kinds of bankruptcy matters, including mortgage modifications.
Our Cincinnati bankruptcy attorneys will determine which particular debt relief strategy will work best for your unique financial situation. They can review your case and help you understand all of your legal options as soon as you call to take advantage of a free, confidential consultation.
Northern Kentucky Mortgage Modifications Information Center
- What is required to get a mortgage modification?
- What are the pros and cons of mortgage modifications?
- Where can I find more information about mortgage modifications in Cincinnati?
Mortgage modifications involve mortgage servicers agreeing to alter the terms of original mortgage contracts, usually by lowering interest rates, extending loan lives, or reducing principal balances. Every mortgage servicing company has its own modification programs, options, and eligibility requirements.
One of the most popular mortgage modification programs was the Federal Home Affordable Modification Program (HAMP), which expired in 2016. HAMP’s sibling, the Home Affordable Refinance Program (HARP), was extended until 2017. Whereas HAMP assisted homeowners who were in danger of foreclosure, HARP benefits homeowners whose mortgage payments are current but who cannot refinance because the values of their homes have declined.
Ohio and Kentucky are also two of the states that have Hardest Hit Fund (HHF) programs, which are programs designed to provide assistance to struggling homeowners through modification, mortgage payment assistance, and transition assistance programs. Generally, all mortgage modification applicants will need to have three things:
- Hardship / Financial Need — Applicants often need to have experienced some kind of recent life-altering event, such as a job loss or serious injury that has created a newfound financial issue. Difficulties caused by excessive luxury purchases, for example, would probably be denied.
- Income / Ability to Pay — Lenders need to know that applicants will be able to make their monthly payments. When a newfound financial difficulty is the result of job loss, the applicant may be able to argue that a reduced payment will be affordable when that individual finds new work. If the applicant was seriously injured, the monthly payment may be based on the reduced compensation he or she receives.
- All Required Application Paperwork — Lenders often require applicants to complete packets that can include any one of a number of different items, such as a hardship letter, paycheck stubs, or personal budgets. Applicants are frequently asked to resubmit certain documents.
Modifying your mortgage can provide numerous benefits. It is important to remember, however, that many mortgage lenders also ensure that such modifications can be beneficial to them too. Homeowners will want to be sure they have experienced attorneys who can ensure they are not agreeing to terms that can quickly become rather unfavorable.
Some of the possible benefits of a mortgage modification may include, but are not limited to:
- Avoiding foreclosure — Perhaps the biggest benefit for many, but modifying a mortgage does not always guarantee a foreclosure being avoided;
- Lower interest rate — Applicants may be able to secure a much lower fixed interest rate and possibly switch to an interest-only mortgage;
- Smaller payments — Many lenders can lower payments by extending the terms of the loan, and applicants will pay less every month (although for longer than they were originally planning); and
- Balance adjustment — A lender may be willing to write-off a small percentage of the outstanding mortgage if negative equity is an issue.
Mortgage modifications are not without possible drawbacks. Some of the major concerns applicants should be aware of include, but are not limited to:
- Eligibility — Not everyone will be able to qualify for mortgage modifications because of the occasionally strict limitations of the programs;
- Credit score — While mortgage modification is not likely to negatively impact an individual's credit score as much as filing bankruptcy, it will still have some detrimental impact;
- More money — Again, lenders are looking to maximize their own financial incentive in any mortgage modification, and some agreements contain enormous balloon payments later on in the agreement or simply end up costing applicants an even greater amount than they would have otherwise spent over the life of the loan;
- Later denial — Some seeming approvals may only be for trial periods, with applicants ultimately having modifications denied a few months into what they assumed were approved plans; and
- Scams — Numerous companies have attempted to take advantage of desperate homeowners seeking mortgage modifications. Be absolutely certain to do an exhaustive background check of any business that offers mortgage modification assistance.
Save the Dream Ohio — Save the Dream Ohio began as a multi-agency, foreclosure prevention, outreach initiative involving partners from state government, nonprofit housing counseling agencies and legal aid organizations. The program's hotline is administered by the Ohio Housing Finance Agency (OHFA) and connects financially distressed homeowners with HUD-approved housing counseling agencies to help families avoid foreclosure through programs such as the HHF. Visit this website to access foreclosure prevention resources, find help for homeowners, and read success stories.
Kentucky Homeownership Protection Center — The Kentucky Homeownership Protection Center identifies itself as being the only statewide assistance program created by the Kentucky state government. It was established by the 2008 Kentucky General Assembly to address the foreclosure crisis in the state. On this website, you can learn more about the HHF and Kentucky Unemployment Bridge Program (UBP) as well as alternatives to foreclosure.
Steiden Law Offices | Cincinnati Mortgage Modifications Attorney
Are you hoping to modify the terms of your mortgage to avoid a possible foreclosure? You will want to make sure that you contact Steiden Law Offices as soon as possible.
Our Cincinnati bankruptcy lawyers represent clients in communities throughout Hamilton County in Southern Ohio as well as Kenton County and Boone County in Northern Kentucky. Call or complete an online contact form to have our attorneys provide an honest and thorough evaluation fo your case during a free, confidential consultation.