Loan Modification

If you are behind on your mortgage payments and are looking to save your Staten Island Real Estate from foreclosure, you may be contemplating doing a loan modification. A loan modification is a special program that banks offer to help individuals with their mortgage payments. A loan modification can stop a Staten Island foreclosure immediately.

How Does a Loan Modification Work?

A loan modification allows individuals a way to afford their mortgage payments. Banks will find different ways to help a consumer who is struggling to pay their mortgage. Some ways banks have helped individuals facing foreclosure in Staten is by adding the past due mortgage to the end of the loan. This is also known as having a balloon payment at the end of the loan. A balloon mortgage payment at the end of the loan allows you to save money for years. The balloon payment won’t be due for 15-20 years later allowing you time to save. At the point that the large payment at the end of the mortgage loan becomes due, you may be able to refinance or sell your home. If a balloon payment is not an option, some mortgage lenders will spread the past due mortgage payments over the length of the loan.

What Are the Requirements for a Loan Modification?

A loan modification, can help individuals who are behind on their mortgage. Unfortunately, not eveyone qualifies to have a mortgage modified. A good Staten Island mortgage modification lawyer can help to ensure that your modification is submitted properly.

Many individuals are under a misguided impression, that banks will take into consideration their hardship. The sad reality is banks don’t care about your medical issues, if someone died, or if you lost your job. Unfortunately, when deciding whether to give a loan modification, the only thing the bank cares about is whether you can afford to make your mortgage payments right now. Thus, if too much time has passed and the debt owed is too high, the chances of a modification are slim.

The bank will only approve your mortgage modification if you can show that you can afford to make your mortgage payments.

Our Staten Island lawyers work with individuals to ensure that they can hopefully, afford to make the payments. We will also review your financial situation to determine if you are a good canidate for a loan modification.

What is the Mortgage Modification Process

A loan modification can be completed once your bank sees that you are facing a financial hardship. Typically, this means that you will need to be in default on your mortgage payments for atleast 90 days. Once you have fallen behind on your mortgage payments, our Staten Island lawyers will request a mortgage modification package from the bank. This package is the most important thing when applying. Many individuals who try to do it themselves are not able to fill these packages out correctly. If one thing is wrong on the loan modification package, the bank will not accept it and the foreclsoure process will continue.

The mortgage modification process can take a few months. Often times, the bank will lose documents or need updated paperwork. This can be extremely tedious and time consuming. Banks need all of the paperwork updated every 30 days. If you work or don’t have time available to sit on the phone with the bank, this can lead to a denial.

If the mortgage company has started foreclosure proceedings and you live in Richmond County, we will go to foreclosure court for you. at foreclosure court in Staten Island, we try to enter mediation with the bank to give our clients a modification package.

Many times individuals are not granted modifications and have to go to Federal bankruptcy Court to be able to keep their homes.

What Happens If I am Denied a Modifiction

If you are denied a loan modification, dont panic. Many individuals are denied modifications. Luckily, bankruptcy is a great tool for people who are facing foreclosure. When you file bankruptcy an automatic stay intiates. The automatic stay stops creditors from being able to go after you. Thus, as soon as you file for bankruptcy, the automatic stay begins and creditors can no longer begin any foreclosure actions against you.

Our bankruptcy lawyers have filed bankruptcy petitions on the eve of a Staten Island foreclosure sale to stop a foreclosure. While I don’t recommend waiting this long to file bankruptcy, it shows you how strong a tool filing bankruptcy is. When you file bankruptcy to save your Staten Island Real Estate, there are two chapters that you can file. Chapter 7 and Chapter 13 bankruptcy. Both Chapters allow ways for individuals to save their homes from foreclosure. Below we will discuss both chapters of bankruptcy and how filing bankruptcy can save your home from a Staten Island foreclosure:

Chapter 7 bankruptcy

Allows individuals in Staten Island to wipe away all of their debt and start over. In a chapter 7 bankruptcy individuals get their debt discharged. This means that they no longer have to repay their debts. If you a facing foreclosure, wiping out all of your other debt can help you afford your mortgage payments. To qualify for a Chapter 7 bankruptcy in Staten Island, you must pass a Means Test. The Means Test determines who qualifies for a Chapter 7 bankruptcy, based on their income and expenses.

Chapter 13 bankruptcy

Individuals who live in Staten Island and don’t wualify for a Chapter 7 bankruptcy, will have to enter into a Chapter 13 repayment plan. In a Chapter 13 bankruptcy, individuals pay their debts back over 3-5 years. In a Chapter 13 bankruptcy, individuals can pay the arrears on their mortgage over the 3-5 year plan, allowing them the ability to catch up on past due mortgage payments.

Should I File Bankruptcy To Stop a Foreclosure?

In New York, the bankruptcy court has implemented a process known as loss mitigation. To enter into loss mitigation, you will need to submit a request with the court. Loss mitigation allows you and your lender to work together to hopefully come up with a modification that will work. During this process the judge oversees everything that is going on. Thus, the banks cant “lose documents” or stall the modification process.

Entering into loss mitigation using the bankruptcy process to save your Staten Island home is much better than doing a loan modification in State Court. This is because bankruptcy judges try to push the banks to give modifications to individuals facing foreclosure in Staten Island.

While in loss mitigation, our Staten Island bankruptcy lawyers will appear infront of the federal judges for status hearings. These hearings ensure that both parties are doing what they are supposed to.

Loss mitigation can be done in both chapter 7 bankruptcy and chapter 13 bankruptcy. If you have lower income and little equity, chapter 7 bankruptcy is usually the better option. If you are a higher wage earner, chapter 13 bankruptcy will more than likely be the route you will have to take.