The home mortgage loan industry has changed the terms of stated income loans requirements. Now, most lenders want the traditional full documentation loans and borrowers having to qualify by using standard debt to income ratio calculations.
This change has the most affect on the high cost housing markets in Florida, California, New York, New Jersey, Connecticut as well as parts of Massachusetts, Maryland and Virginia. The reason these homeowners in these markets are affected is that they have used adjustable rate mortgages and qualifications such as stated income, stated assets and in many cases no verification of employment.
These adjustable rate mortgages (ARMs) will continue to adjust upwards through the year 2010 and into 2011. The majority of homeowners can’t refinance because they’ve lost equity in their home, lost their job, or experienced other hardship. Their only option is to negotiate with their lender or go into foreclosure.
When homeowners contact their lender to try to get mortgage loan modification assistance they generally don’t make contact with the right person who has the capacity to make changes in the terms of the loan. They get frustrated and give up until they are close to foreclosure.
If a borrower has a real hardship and the bank reacts slowly or refuses to listen to the homeowners complaint, a foreclosure results and the borrower’s credit is damaged for seven years. If you are facing this type of situation and getting nowhere with a lender and you’re not getting the results you need in a timely manner, hire an attorney whose specialty is foreclosures and loan modifications.
There are countless stories from borrowers who state that banks will not even discuss their financial distress unless they are behind two to four months in payments. By that time, your hard-earned credit scores from paying responsibly for years are wiped out. Sadly, in that situation, you may never be eligible for a home loan at market rates for a very long time.
The solution to this problem is to use a loan modification company with an attorney on staff who can get answers and responses to your situation so it is resolved in a timely manner. You’ll end up keeping your precious home, getting a loan modification, getting your interest rate reduced to an affordable level, and in some instances, even getting your loan principal reduced.
A reputable company will have an experienced debt representative call you to see if you actually qualify based on certain criteria. You want to deal with an attorney backed loan modification company; a company that has years of experience, success, with paralegals and an attorney on staff. Also, make sure you get in writing that if you do not qualify you will not have to pay any fees. You will sleep much easier knowing that you have a qualified team working on a solution for you whether it’s for a short sale, tax ramifications of a short sale, a deed in lieu of foreclosure, or a loan modification.
A lawyer whose specialty is negotiating with lenders can achieve amazing results particularly if they uncover RESPA or TILA violations to use as leverage. A real estate attorney speaks their language and gets the lender to negotiate. When homeowners use an attorney, the lender’s legal department and loss mitigation department suddenly become very receptive and responsive. Having a good legal team on your side can stop foreclosure and get a loan modification fast!