Homeowners who are facing a foreclosure or who need help with a mortgage may be able to use a lawyer to modify their home loan. Many families are finding success with getting a loan modification after hiring a lawyer to try to modify their loan.
While there are some things to be cautious about, using an attorney for a loan modification also has many benefits. For example, one benefit of using a lawyer to help modify your loan is that typically they will be able to advise the homeowner on the ins and outs of the numerous state and federal government homeowner-assistance programs and foreclosure prevention tactics.
Another of the pros of hiring an attorney is that many states govern and regulate how lawyers can operate, and there are laws that regulate how they are able to work with for-profit foreclosure-prevention and debt-recovery firms. They have more rules, standards and regulations that they need to follow that are established by state bar associations, so the chances of a scam or being taken advantage of are much reduced. Attorneys have a higher standard than they need to operate to. In addition, state bar associations typically ban lawyers from instructing non-lawyers on how to perform legal services and mortgage modifications. Many lawyers can also help consumers deal with debt. Learn more on attorney debt assistance solutions.
While they are definitely advantages to using a lawyer, homeowners who decide to hire one should contact their local bar association just to be extra safe to ensure they find an ethical law firm that provides loan modifications. This is advice from a national nonprofit consumer advocacy group.
You can contact a non-for profit law firm in your state to both find a local attorney who can help with the mortgage modification, and to also ensure the firm is legit. Find a lawyer, and also discuss additional foreclosure prevention tactics. Learn more.
While each firm and state may have a slightly different process, in general lawyers typically charge homeowners anywhere from $1,500 to $2,000 for a loan modification. However, as indicated above they operate to a higher standard, so many will be reluctant to accept clients who have lost their jobs. They often times will not take a case in which the homeowners has little or no chance for success. They will usually not take cases in which the clients has no other outside income. The reason being that arguing with the bank, lender or mortgage servicer in that situation can be pointless, and the chances for a successful modification are minimal at best. The fact is that in certain cases a foreclosure filing just can’t be prevented.
After finding a law firm, at attorney will typically ask for the clients last two federal income tax returns, six months’ worth of pay stubs, two most recent W-2 forms, and they will also look for evidence of other sources of income and a letter explaining your predicament. They will meet with and understand the applicants financial situation and goals. The lawyer will then puts those various documents into a loan-modification application, which is intricate paperwork that varies by state, lender and servicer. After submitting all necessary forms, they will proactively follow up with repeated calls to the loan officer. The modification process is long and intensive, and it may take weeks or months before an applicant learns whether his or her loan will be modified and whether the mortgage rate will be lowered or the principal amount reduced. They will negotiate with the bank or lender on the clients behalf, and do whatever it takes to help the client modify their mortgage and save their home from a foreclosure filing.
Nothing in life is ever guaranteed. Homeowners should be cautious about any guarantees made by an attorney that a home loan will be modified, since the fact is that not all can be, and that in certain cases the best solution for a homeowner is to file a foreclosure and move on. Be cautious of requests for an upfront fee or that the property title be signed over to a third party. Never deal with an attorney or any type of counseling agency that offers to redirect the monthly mortgage payments to a third party who will forward them to the lender or mortgage servicer.
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