Home Loan & Mortgage Modifications In New Jersey
Loan modifications are the most commonly used solution for resolving foreclosure actions and mortgage loan defaults in New Jersey with out bankruptcy. The mortgage companies are more willing to enter a loan modification than in years passed due to the foreclosure crisis. However, mortgage companies are not required to modify a loan, this is all done on a voluntary basis.
Under most circumstances, a loan modification will reduce the homeowners’ monthly payments, by allowing the interest rate to be reduced and the mortgage will be deemed current by adding the arrears to the end of the loan. Sometimes, the mortgage company will modify the loan by amortizing the arrears over the life of the mortgage loan, rather than adding the arrears to the end of the loan. This means, the mortgage company will divide the past due balance over the remaining life of the loan. It is highly unlikely that the mortgage company will reduce any of the principal.
Loan modification options will vary for each mortgage company. Most of the loan modifications will be subject to differing requirements. There is a new federal law named, “Home Affordable Modification Program,” which is referred to as “H.A.M.P.” This law was set into place to generate the majority of loan modifications and allow the government to regulate mortgage companies, giving the homeowner every advantage possible for bettering their situation.
The debtor or representative of the debtor must request an information packet or loan modification application for completion. This can be obtained from the mortgage company. This application will require detailed financial information to include monthly income, expenses and assets. The mortgage company requires copies of recent pay stubs, tax returns and also a hardship letter that explains the debtors financial situation. The mortgage company is naturally going to require proof that the debtor will have the ability to make the modified mortgage payments. A person may be denied approval should there be a substantial amount disposable income creating no real hardship in their financial situation.
The loan modification programs are new, so circumstances make it so there are an insufficient number of representatives to handle the application and the majority of representatives are inexperienced, which can make this extremely discouraging and/or frustrating to the debtor. The most common frustration would be a debtor sending their packet of information numerous times before it will actually reach the correct representative. This representative must receive all of the required information in order for the information to be processed to the next step. Another common frustration would be that a debtor has an extraordinary amount of difficulty contacting the correct mortgage representative.
You are able to find more information about loan modifications in New Jersey on our website or visit the Home Affordable Modification Program website.
Contact a new Jersey Bankruptcy Attorney
The Attorneys who specialize in New Jersey Loan Modification at the Law Offices of Robert Manchel have been handling bankruptcy cases and helping homeowners handle foreclosure for nearly 20 years and have, in this time period, successfully represented thousands of clients. If you are dealing with foreclosure or are considering bankruptcy, contact a NJ Bankruptcy Attorney at our firm at 866.503.5655 for a free and confidential consultation. We are here to help you.