Arizona currently has one of the worst housing markets in the United States. Many homeowners are strapped by an unmanageable mortgage and need to take decisive action before the property goes into foreclosure.
Our law firm, Platt & Westby, P.C., is dedicated to helping clients during the good times and the bad. For most Arizona homeowners, the economic downturn has caused a situation where they cannot afford their home, nor can they sell it. Yet with most lenders out of state or even out of the country, lenders do not understand the extreme housing situation in Arizona—therefore homeowners are not extended any sympathy.
Our attorneys provide experienced legal representation to homeowners in Phoenix and surrounding areas. We assist homeowners with exploring avenues to reduce monthly mortgage payments, such as lien stripping (removing second mortgages), filing for Chapter 13 bankruptcy or negotiating loan modifications.
In negotiating loan modifications with your lender(s), we focus on payment reduction through a variety of means:
- Reducing the interest rate
- Changing a variable rate to a low, fixed rate
- Reducing the principal amount of the loan to the current fair market value of the property
- Adjusting other terms of the mortgage
About Loan Modifications
A loan modification is way of taking an already existing loan, reworking one or more of the terms to change them permanently, which allows for lower payments that the borrower can afford. There are some important items about loan modifications that may influence your decisions in obtaining one.
According to the U.S. Department of Housing and Urban Development:
- Only one loan modification may be made during any 24-month period. This means that prioritizing your loans becomes a necessary step. Understanding the terms and conditions of each loan is part of this process, and a qualified real estate attorney is able to help you sort through the boilerplate language.
- Even if you have to file bankruptcy, and are concerned about being unable to afford the necessary legal assistance, the lender is able to work the costs associated with legal fees and the foreclosure process into the modified principal balance.
- In the event there are late charges associated with your loan, the lender is expected to waive them so they will not be included in the new balance.
- If you find yourself in the situation where the borrower spouse is unemployed, but the other spouse is employed but not on the mortgage, it is not guaranteed that a loan modification is possible. The lender will first conduct a review of the finances to determine whether the surplus income is enough to pay for the modified mortgage, while being insufficient to pay the arrearages on the original.
It is important to have an experienced lawyer in your corner when pursuing a loan modification. Not only is it difficult to get anywhere without an attorney, any resolution you do obtain may not be as solid as you are led to believe. Our attorneys will take the necessary precautions to ensure your interests are protected.