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Articles - Bankruptcy Information

Loan Modifications

Don't be Taken

by Hale Andrew Antico, Esq.


With recent panic in the mortgage field, and mortgages payments spiraling higher and higher, many of you are inquiring about short sales and loan modifications.

If you have a high mortgage payment, the position of the Law Offices of Hale A. Antico is that, while loan modification is a noble goal and a desirable result, the mortgage companies are not rewriting everyone’s loan. In fact, they are not changing half the people’s loans. Chances are, if you begin down the road of loan modification, your life will be put on hold for many months hoping to get an answer from the lienholder, and the answer is most likely going to be “no”.


If you are thinking about retaining the services of some “loan modification specialist” who may even have an attorney on staff, you are likely throwing your money away. These places charge between $3,000 and $4,000 to do what you can do yourself. Many are predators, swooping in and taking money from people who are desperate. They guarantee nothing, and the money you give them is gone. Ask them their success rate. Ask them about a money-back guarantee. Ask them for a list of satisfied customers to call. Ask to meet your new lawyer. Even if they can provide all this, go in with your eyes wide open, and be aware that you will still be giving lots of documents and waiting many months, and again, the likely response from the mortgage company will be a “sorry, but we can’t do it.” We will not help them fleece you, other than giving permission for them to talk to you, if you desire it.

 

Maybe you can do this yourself. And chances are, your mortgage lender will stop talking to you if you file a bankruptcy. So, if you think you're going to make progress while contacting your lienholder, you should get that set before filing a bankruptcy or else risk that the loanmod will come to a screeching halt once they learn you are filing bankruptcy.


I am an attorney, and I specialize in consumer debt. I would never make promises of modifying your loan by asking your lienholder to do it for you. I have no more clout with them than you do. It’s all about your numbers and finances. Either they think it makes sense or it doesn’t. But an attorney on the staff of these “loanmod houses” who advertise on freeway offramps doesn’t make it more likely they will get your desired result.


A better solution for those of you with Second Mortgages is to file a Chapter 13 bankruptcy and, if your home is worth less than the balance of the First, strip the lien. In the upcoming year, Congress may allow you to reduce the First Mortgage in new Chapter 13 cases, but as of this writing, that’s not the law yet.

Want a short sale? Again, that’s desirable and wonderful, but banks aren’t buying back everyone’s houses. Short sales fall through, people don’t qualify for financing, and you’ve put your life on hold for months.

The goal of writing this is not to douse your hopes and dreams. It’s to provide a reality check and cut through the fog your emotions and hopes and dreams might have clouded your better judgment with. There are many people making promises out there, and the victims of them show
up in our office, their wallets thousands of dollars lighter. There are no magic beans, and I don’t have a magic wand.


However, as a State Bar-certified attorney who has been licensed for fifteen years who specializes in helping people with debt, I can suggest that maybe a bankruptcy will allow you to catch up on late mortgage payments. Maybe a bankruptcy can allow you to lose a second mortgage. In the future, maybe a bankruptcy can allow you to shave thousands of dollars of
principal off your first. I can help with all of these options. They are tried, true and legitimized by Congress and flow from our Constitution. As for the friend of a friend who says that they can help you modify a loan, we only say: be careful, think twice and, unfortunately, buyer beware.

 

Don't Delay

| 15.07.2009 | Read more | Print |