As loan modifications have become more popular, it’s more important than ever to properly inform the public as to what the various elements surrounding loan modifications.

Q: Is a loan modification right for me?

A: A loan modification can be right for any homeowner who has a steady source of income and who is facing a serious financial challenge.

Q: Do I qualify for a loan modification?

A: Obviously it depends upon your situation.  If you contact a California loan modification attorney today, you could get more information to help you make an informed decision about your financial future.

Q: Do I need to be in default or late on my mortgage loan to get a loan modification?

A: No, loan modification standards have changed of late, and loan modifications can be negotiated for properties in default as well as current on their payments.

Q: What is forbearance?

A: Forbearance is a voluntary postponement of the foreclosure process by a lender.  A lender will refrain from foreclosure if some sort of negotiation can satisfy any overdue payments.  In most instances, unless a loan modification attorney is brought in, there is no change to the mortgage.  Forbearance is not the same as a mortgage loan modification.

Q: How are loan modifications negotiated?

A: Successful loan modifications are negotiated usually by qualified attorneys assisted by experts in various fields and other facilitators.  In this situation, a loan modification attorney will represent a homeowner in negotiating with the lender.  The loan modification attorney will attempt to convince the lender or bank that if the loan is modified the homeowner will be able to make payments and stay in the home.  Sometimes expert witnesses are used to make the case.

Q: Can I negotiate my own loan modification if I am a homeowner?

A: Yes you can.  However, without the knowledge of the industry, the law and how banks operate, you would be at a serious disadvantage.  A loan modification attorney with a qualified, experienced background understands the terminology, the history and how banks negotiate.  While you may never have negotiated a loan modification before, an experienced loan modification attorney may have negotiated hundreds, if not thousands of loan modifications successfully.

Q: What are the advantages of using a loan modification attorney?

A: There are actually quite a few benefits.  They usually get a quicker, positive response from lenders as they have the law on their side.  They also have experience dealing with the mountains of paperwork, the complex process and lenders who will do their best to negotiate a deal that benefits them and not you.

Q: What makes a loan modification acceptable to lenders?

A: In the end, your lender wants to make sure they are getting their money.  For a loan modification to be acceptable, the property owner needs to show two main facts: an obvious hardship and inability to keep making mortgage payments at the current rate; and the ability to continue paying the mortgage if payments are reduced.

Using a California loan modification attorney can be a huge benefit.  A California loan modification attorney can help you get a loan modification quicker and can help you get a loan modification that suits you better.  California loan modification attorneys have the experience and knowledge to work with lenders and negotiate a better deal for the borrower.  A homeowner might be a bit more desperate to make a deal, something the lender or bank might take advantage of.  However, if a loan modification attorney is negotiating new terms for a loan, the lender will be in a much different position.  In fact, a loan modification attorney can use previous experiences with that lender as leverage, or even use past successful deals to get the lender to agree to more favorable terms.  All of this could add up to a great mortgage loan modification as well as thousands of dollars in savings per year.

Here are some other advantages to using a California loan modification attorney:

A loan modification attorney will take a systematic approach – A seasoned loan modification attorney will most likely have helped hundreds, if not thousands, of people stay in their homes through loan modifications.  They will have developed a method for processing paperwork, getting the information to the lender, getting messages from the lender and then processing the new loan modification.  This kind of order is important when you are dealing with a process that is incredibly detailed and incredibly important.

A California loan modification attorney has a team in place – Rather than dealing with the situation all by yourself, or with a spouse who knows as much as you do, a loan modification attorney will most likely have other attorneys or a loan modification company behind him or her, making the process smooth and easy.  These experienced people can take a huge burden off of you, and can attack the problem from different angles.  Rather than dealing with one person, your lender will now be dealing with a number of knowledgeable people who can answer questions quickly, call the lender more often and put you on the best footing possible for a loan modification.

A California loan modification attorney will have an objective view of the situation – You are obviously tied to your house, so you may not have the best view of the situation.  This is important, because it means while negotiating with the lender, they won’t jump at the first offer from the lender.  They can wait, take their time and guide you through the process successfully.  A loan modification attorney can be the calm individual in your life, not affected by the financial storms going on all around you.

Creditors respond better when they hear the word “attorney” – Just like the rest of us, creditors fear the law.  If they know an attorney is negotiating with them, they will react quicker, be more willing to listen to deals and may even make much better offers.  All of this will benefit you in the end.

If you are seriously considering a home loan modification, you probably are researching the subject and exactly what the loan modification industry is like.  Home loan modifications are definitely not something new, but they are new to many people.  The recent real estate and credit crisis has people wondering how long they can last in their current situations; some have mortgage payments which have spiked due to adjustable interest rates and others are threatened by foreclosure.  

Looking for answers is nothing new, and looking for exactly who can provide a way out is also nothing new.  In researching loan modifications, you may have already discovered that there are a number of companies out there willing to take your money.  However, many of these companies provide empty promises, because they are not fully equipped to help you in your time of need.  A loan modification company can really only provide effective assistance if they employ, or are run by, a loan modification attorney.  The reason is that the negotiating can only be done by an individual who has power of attorney.  Also, reviewing the mortgage contract and being able to give legal advice on laws governing mortgage loans is the domain of an attorney.  Without a loan modification attorney, a loan modification company is like a dog with no teeth, all bark and no bite.

You may also have come across companies selling you software or “how to” books on handling your own loan modification.  Unfortunately, this will only set you back hundreds of dollars and might even harm your chances of getting a loan modification.  Such programs and books will promise to provide you with information on lenders, tell you which loan modification options are right for you, let you know if you qualify for a loan modification, and more.  They might even try to claim they can teach you how to lower your interest rate, eliminate fees and do your loan modification negotiating yourself.  These programs can be inaccurate, misleading and dangerous.  If you make a mistake on your loan modification application, you could ruin your chances of getting a loan modification and even lose your home if you’re in the midst of foreclosure.

You need someone you can trust with your loan modification, someone with experience, knowledge and a track record of success.  A qualified loan modification attorney can provide you with the insight you need, as well as the support you deserve.  Instead of trying to figure out forms and paperwork that you can’t understand, or trying to handle a complex process on your own, contact a loan modification attorney.  You do not want to be left on your own to negotiate with some mega-bank, or organizing three years’ worth of financial paperwork with no guidance.  You need an experienced professional who can make the process easier for you and help you keep your home.  Avoiding foreclosure is possible, but only if you trust the right people to get you a loan modification.  Contact a qualified loan modification attorney today to begin the process of keeping your home.

Are you having a hard time with your mortgage?  Are you afraid that you are going to slip into foreclosure?  Did you already receive a foreclosure notice?  If you answered yes to any of these questions, or if you are in any challenging financial situation that jeopardizes the safety of your home ownership, then you probably need to look into a California loan modification.  A California loan modification is the renegotiation of your current mortgage loan so that your monthly payments are lower and more affordable.  

If you are considering a California loan modification, then you should probably follow some important tips that may help you choose a loan modification company, choose a loan modification attorney, get the best deal possible and make the process as painless as possible.

1.    Have a qualified, experienced loan modification attorney examine your mortgage contract for any potential violations.  It is important to have an attorney experienced with contracts review your mortgage to see if there were any “Truth in Lending” violations that may help you in your loan modification negotiations.

2.    Have a qualified California loan modification attorney help you gather and organize all of your financial information, including:  bank statements from the last year; tax returns from the last year or two; pay stubs; savings and retirement account information; and much more.  Having this information organized properly will make your California loan modification application easier to fill out.  It will also make writing your hardship letter much easier.

3.    Know Your Budget – It’s important to remember that a loan modification does not make your loan payment disappear.  Your loan modification simply resets the terms and lowers your payments.  You will still have to make your monthly mortgage payments on time once the loan modification goes through.

4.    Save up your house payments – Usually, people stop making their house payment because they cannot afford to make the full payment.  For example, if someone has an adjustable rate mortgage (or ARM) and their interest rate increases, doubling their loan payment from $1,100 to $2,200, they will stop making payments.  However, this should not be taken as an invitation to just spend that $1,100.  Once you get your loan modification you will have to make a larger payment, as well as subsequent payments every month.  Put the mortgage money into a high-yield savings account and let that money be kept in one place accruing a little bit of interest.  If it takes you four months to complete the loan modification process, you should have $4,400 plus interest waiting to be spent on keeping your home.

These are the kinds of tips a qualified loan modification attorney can inform you of.  Keeping your home has to be a high priority in your life, and a qualified, experienced California loan modification attorney can help you achieve that goal.  Spiraling debt, bills piled high and foreclosure notices can cause fear, anxiety and even apathy.  However, a California loan modification attorney can help you formulate a plan to stay in your home without having to declare bankruptcy.

Everyday we read about the worldwide financial crisis and, specifically, about the U.S. banking and housing crisis.  To understand the challenges facing borrowers during the Housing crisis, it is critical to understand adjustable rate mortgages – how they work and how they can impact you. 

ARMs offer both advantages and disadvantages. Unlike a fixed-rate mortgage, an ARM provides interest rates that change periodically – and payments that go up or down accordingly.  At first, lenders generally charge lower interest rates for ARMs and this makes an ARM easier to afford initially.  If interest rates remain steady or move lower, this can work to your long term advantage. It is important, however, to weigh the risk that if interest rates increase in the future, so will your monthly payments. 

The initial rate and payment on an ARM will remain in effect for a limited period–ranging from several months to 5 years or more. After this initial period, the interest rate and monthly payment may change at regular intervals – every month, every year, every 3 years.   This period between rate changes is called the adjustment period.

The interest rate on an ARM is determined by two things: the index and the margin. The index is usually a standard measure of interest rates and the margin is an extra amount that the lender adds. If the index rate goes up, so does your interest rate and monthly payment.  On the other hand, if the index rate goes down, your monthly payment may go down. Not all ARMs adjust downward, however so be sure to read the details about any loan you are considering. 

Lenders base ARM rates on a variety of indexes. You should ask what index will be used for your ARM, how it has fluctuated in the past, and where it is published.  

The margin may differ from one lender to another, but it is usually constant over the life of the loan. The fully indexed rate is equal to the margin plus the index. For example, if the lender uses an index that is currently 4% and adds a 3% margin, the fully indexed rate would be 7%.

Some lenders base the amount of the margin on your credit record – the better your credit, the lower the margin. In comparing ARMs, look at both the index and margin for each program.

An interest-rate cap places a limit on the amount your interest rate can increase. Interest caps come in two forms: A periodic adjustment cap, which limits the amount the interest rate can be adjusted up or down from one adjustment period to the next, and a lifetime cap, which limits the interest-rate increase over the life of the loan.  By law, virtually all ARMs must have a lifetime cap.

In addition to interest-rate caps, many ARMs limit, or cap, the amount your monthly payment may increase at each adjustment.  A payment cap can limit the increase to your monthly payments but also can add to the amount you owe on the loan. This is called negative amortization.

If you are considering an ARM, ask yourself: 

• - Is my income enough–or likely to rise enough–to cover higher mortgage payments if interest rates go up?
• - Will I be taking on other sizable debts, such as a loan for a car or school tuition, in the near future?
• - How long do I plan to own this home? If you plan to sell soon, rising interest rates may not pose the problem they do if you plan to own the house for a long time.
• - Do I plan to make any additional payments or pay the loan off early?

Golden Rule:  Before you consider any loan, ask questions and read the details. For information and news please visit Loan Modification Help Center

The new housing plan announced by President Obama last week has two main parts.