Despite the economic recovery from the recent recession, millions of homeowners still struggle to make their mortgage payments. Rising interest rates and stagnant wages have combined to increase monthly mortgage payments beyond what many homeowners can afford to pay. William D. Schroeder, Jr., Attorney at Law, is the bankruptcy lawyer Philadelphia homeowners turn to in order to alleviate the pressure of a heavy mortgage burden through a modification of the mortgage agreement.
What Is Mortgage Modification?
A mortgage modification is a renegotiation of the terms of your original mortgage agreement. Typically, the lender and the borrower agree to either lengthen the term of the loan, reduce the interest rate, forgive late fees, or even reduce the principal on the loan. A modification is a win-win for both parties. Lenders are willing to make the changes because they know that reduced payments are worth more than the value of a foreclosed property, while you secure a payment that fits your new financial situation.
If you can demonstrate significant financial hardship, you may apply for a modification. Loss of income, unemployment, illness and other factors outside of your control that have led to financial troubles can be basis for qualification. Even if you are behind on your mortgage, are in foreclosure, or even if you are in bankruptcy, you can qualify for assistance.
How Do You Apply For A Modification?
To start the modification process, you must contact your mortgage lender. The best way to do so is with a bankruptcy lawyer that Philadelphia homeowners trust, who can be your advocate in the proceedings. The process can be time consuming, complicated, and frustrating. Often it is necessary to have someone with legal expertise in mortgage lending to explain your options and represent you with the mortgage company. Once you have made contact, there are four things you need to do to increase your chances of approval.
- Organize Your Documents and stay organized—The bank will demand documentation of income, savings and other assets when determining whether to accept your request. Your attorney will assist you in completing all the correct forms and providing the right information, so that no delays hamper your application.
- Write Your Hardship Letter—A key part of your application is your hardship letter, which details the reasons why you need a modification. Through interviews and an understanding of your situation, your attorney will be able to write a hardship letter on your behalf that addresses all of your bank’s concerns.
- Release Your Tax Records—Check stubs and bank records are only part of your income statement. The bank will want to see all of your completed tax returns, and the only way for them to do so is with your permission via IRS Form 4506-T. Your attorney can supply you with the form, and ensure its delivery to the lender.
- Stay Persistent—Right now banks are overwhelmed with modification requests, so yours could easily get lost in the shuffle. Use your attorney as an advocate to stay on top of the application, otherwise you could spend hours every week on the phone, send the same document repeatedly and still receive no update or action on your status.
William D. Schroeder, Jr. is the bankruptcy lawyer Philadelphia homeowners come to for mortgage relief. Contact him today to start your modification application.