Are There Any Incentives For The Lender To Modify My Mortgage?

The incentive to modify a mortgage is obvious to the homeowner; a lower payment. But is there any benefit for the lender in this situation? It is always good to know what each party stands to gain when entering into an agreement, and when your money and home are at stake having that knowledge is all the more important. It is true that the homeowner probably gets the biggest benefit from a mortgage loan modification, they get to keep their house. But that does not mean the bank is not also incentivized or does not realize any upside to agreeing to the modification.

Some things that go in the plus column for a lender when your mortgage is modified are:

•         The cost of litigation, to foreclose, is avoided. These savings can be passed on to you, in the form of a lower interest rate or some other term included in your modification. This does not mean you will get cash in hand when you modify your home loan, but there is a financial savings for both sides.

•         Fewer loans are reported as charged off on the bank’s books. It is easy to forget that banks are anything more than a large corporate entity without a human element, but in truth these companies are staffed by people who need jobs just like the rest of us, and when the overall financial health of a lending institution is in peril, jobs can be lost. The lower the reported loss, the more likely the bank is to thrive and contribute to the local community by offering employment.

•         Rather than taking back the home, the bank gets paid. There is a cost associated with remarketing a home that has gone back to the bank, and most banks would much prefer to be paid than to act as a realtor.

Even though there are incentives for banks to offer and approve loan modifications, not all requests are granted. If your bank has turned you down for a mortgage loan modification, let us take a second shot at it for you. If you are still denied, we can offer alternatives such as bankruptcy or other debt management programs.

For more information about how to modify your mortgage payment, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you soon.

Three Reasons To Have Your Mortgage Modified

When most people start experiencing financial trouble, they try everything they can to stay afloat. That might include borrowing from friends or family, taking money out of savings or a retirement account, or shuffling debts from one credit card to another. But after time, most of these methods catch up with you, and you can end up owing more than when you started trying to get things under control. Rather than make the situation worse, let us help you find a solution that works. One option is to reduce certain debts you pay regularly, so that you have a little extra money each month to make ends meet. A good place to start when you want to reduce a debt is with your house payment.

Three good reasons to have your mortgage modified include:

•         A modification will get you a lower interest rate. A lower interest rate will lower your payment, and when your house payment goes down your disposable income goes up. If you can save money on your house payment, you can put the extra towards other debts so your paycheck stretches farther.

•         You can become current on your house payment through a modification, which will help prevent a foreclosure.

•         A modification, when paid as modified, can help to boost your credit score.

Each situation is unique, and your need to ask for a modification of your mortgage is personal. Whatever your incentive for seeking a modification, let us help. We will deal with the mortgage company for you, which takes a lot of the burdensome leg work off of you so you can focus on other needs. And, if a modification is not going to fix your finances in the way you desire, let us talk to you about the possibility of filing for bankruptcy. With a bankruptcy you can eliminate or greatly reduce some of your debt, making it easier to pay for your house. If you are having a hard time paying all of your bills, remember that you do have options. Let us explain those options to you, so you can make a decision that makes sense.

For more information about a mortgage modification, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.

What Is A Soft Inquiry Vs. A Hard Inquiry On My Credit?

Knowing the difference between certain things can help you to make better decisions in life. For instance, once you understand the benefits of owning a home rather than renting, chances are you are ready to become a homeowner. But part of that process will include getting a mortgage loan, and when you do that you will want to get the best interest rate possible. The lower your rate, the lower your payment. A critical part to getting a good rate will be your credit score, so it is beneficial to know how your score is calculated. Some factors are obvious, like whether you are behind on any payments and whether you are too close to the credit line for a significant number of your obligations. But did you know that just applying for credit might also work to bring down your credit score?

When you make a credit application the lender will take a look at your credit. This is called an inquiry, and there are two different types of credit inquires. There are soft credit inquiries and hard credit inquiries and here is what you need to know about how they differ:

•         A soft inquiry will not generally result in any change in your credit score. Some good examples of soft inquiries include mortgage applications for preapproval, and inquiries made by potential employers as part of a background check.

•         A hard credit inquiry will go on your credit, and when too many of these accumulate your score can decrease. An example of a hard inquiry is when you apply for a loan and the lender pulls your credit to make a final lending decision. Anytime you get an offer in the mail for a credit card and decide to fill it out, a hard inquiry is made. If you are buying a car, or applying for another type of loan, the creditor will make a hard inquiry.

It is always a good idea to keep track of what is on your credit report, and when you request a copy you will see all of the inquiries. If your report contains information that is not accurate, you can make a dispute and request that the offensive data be removed. There is a specific procedure that has to be followed in order to have information taken off of your credit report, and we can help make sure that procedure is followed.

For more information about debt and what to do if you have more debts than you can pay, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.

Will A Mortgage Modification Impact My Credit?

If you are having a hard time paying all of your bills, chance are there are some dings on your credit report. This can make it hard to get loans at good rates, and might even affect your chances of renting a car or an apartment. The bottom line is that credit scores are important financial tools, and keeping yours in a healthy state will help you to manage your money better. So, when you need to make adjustments to your monthly obligations, it is important to know how certain acts will impact your credit.

One way to take charge of your monthly finances is to get a modification of your mortgage. A mortgage modification will give you a lower monthly house payment, and you can use this extra money to pay other bills without feeling as much of a pinch. If you are considering making an application for a modification, here are some things you should know about whether a mortgage modification will impact your credit:

•         The type of modification plan you are seeking plays a role: if you are able to get a plan that is backed by the government, the modification should not have an adverse impact on your credit score. But if you are doing a loan modification through another entity, the chances of it being reported on your credit increase. This is because most programs that are not government programs are actually debt consolidations. When you consolidate debt, a report is made on your credit that the debt is being compromised for less than what is owed.

•         The way your lender reports the modification might impact your credit score as well:  credit bureaus only pick up data that is reported by lenders, so make sure your lender is reporting your modification properly in order to avoid any confusion or inaccurate information on your credit report.

This part of mortgage modifications is an often overlooked aspect of the process, but when we take on your case we make sure to cover all areas of the matter. We know how important it is to keep your credit score in good standing, because once you repair your finances you will have future financial needs. Our job is to get you back on track with your money, and if you are not able to obtain favorable loan terms down the road all of your hard work will feel meaningless.

For more information about managing your mortgage payment or asking for a modification, call us today or reach us online at www.law-ri.com. We will help by looking at the facts of your case and giving you options to reach your financial goals.

Two Alternatives When Mortgage Modification Doesn't Work

When money is tight it is critical to find a way to loosen up the budget and make your money stretch as far as it is needed. One way to free up funds is to lower your biggest payment, which is typically your house payment. You can do this by refinancing, or by getting a modification of your mortgage loan. A mortgage modification lowers your interest rate, and that in turn lowers your payment. But not all requests for mortgage loan modifications go through, so you need to know what your alternatives are when looking for ways to get out from under burdensome debt.

Two options for debt relief when a mortgage modification doesn’t work are:

•         Filing for bankruptcy, either a Chapter 7 or a Chapter 13 case. A Chapter 7 case will wipe out all of your unsecured debt, which means you will not longer have to make payments on your credit cards. Next to mortgages, credit card payments can be the highest debt a household has to meet each month. A Chapter 13 bankruptcy is more like debt consolidation, and some of your unsecured debt will have to be repaid. Just how much of your unsecured debt has to be repaid depends on your particular circumstances, and we can review your case to let you know what to expect.

•         Working out agreements with your lenders for lower payments, either temporarily or on a permanent basis. This type of financial restructuring is usually the result of a settlement reached in litigation, whereby a creditor will agree to reduced payment terms or to accept a lump sum for less than the balance due, as payment in full for a debt.

If you are being sued by your lenders, give us a call. We will work for results that you can live with, and explore all of your options. We understand bankruptcy is not right for everyone, and if that is the case then we will negotiate on your behalf for acceptable repayment terms through litigation or other legal proceeding. But if bankruptcy will work for you, we will get it all prepared and explain the benefits to you. Our job is to give you a thorough explanation of your choices, and help you be successful in whatever choice you make for your money.

For more information about mortgage loan modifications, call us today or reach us online at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations for more convenient one on one office visits.

Are Banks Required To Modify Mortgages?

Asking for a modification of your mortgage loan is a good way to lower your payment, and provide much needed financial relief. The process requires you to make an application and provide some documents to your current mortgage lender. From there though, the result can be different for different people, depending on a number of factors. Income is taken into account, job stability is a factor, and you might even be asked to resubmit documents you have already provided. It is not uncommon to be asked to repeat a task you have already completed, and the process can become tiring. If you get to the end of the road and are told you do not qualify, you can feel defeated. So if might be good to know if the bank is required to give you a modification before you start this process. Unfortunately, the answer is no. That said, it is still worth giving it a try, and an experienced attorney can help make the process go more smoothly.

Here are some things you can expect when you ask your bank to modify your existing mortgage loan:

•         A longer, rather than shorter, timeframe for completion of the process.

•         The possibility that the bank will continue to take collection or foreclosure actions against you while you are seeking the modification.

•         Repeated requests for submission of documents.

•         An offer of a trial modification, which lowers your payments for a limited time and only once you have made all of those payments will a final modification be approved. In some of these trial periods it might be that your bank reports you are not making full payments on your mortgage, which can have an adverse impact on your credit score.

In order to have a successful mortgage loan modification you have to stay on top of things. This can become confusing and time consuming, especially if you are also trying to hold down a job during the process. But we can help. We have experience with modifications, and can also offer other options to relieve your debt load. If a modification is not right for you, bankruptcy is another alternative. Or, you might consider a refinance of your home with an entirely new lender. Whatever your needs are regarding overwhelming finances, we can provide assistance.

For more information about mortgage modifications, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.

Supreme Court Overturns Important Bankruptcy Ruling

When a large corporation or company has to file for bankruptcy, the impact is far reaching. The immediate effects are felt by employees who may suddenly find themselves out of work, but suppliers all along the chain can be affected. To illustrate how this works, think about some of the large retailers who have recently had to close their doors. The sales clerks, stockroom workers, managers, and other employees are now all without jobs. And, the companies that supply goods, will also now experience a decrease in their sales. The ripple effect is that supply companies may also have to lay off workers or find creative ways to stay afloat. But most bankruptcy cases that involve businesses allow for the repayment to suppliers and other vendors, in the regular course of business. That works out fine if the bankruptcy case also works out, but what happens when a business’ bankruptcy filing hits the skids?

The US Supreme Court recently had to review this type of scenario, and the result is significant for the following reasons:

•         When a large company’s bankruptcy was dismissed, the Court allowed for repayment to certain types of creditors.

•         The repayment scheme left out other creditors, who were rightfully upset at the repayment plan.

•         Those creditors appealed the Court’s ruling regarding the proposed repayment, and won!

•         The Supreme Court decided that the agreement did not put the parties back into the positions they were in prior to the case being filed and that some creditors were put in an even better position than before. This was not a power the bankruptcy court had, according to the Supreme Court, at least not according to certain provisions of the Bankruptcy Code.

This ruling could be significant because it could alter the way companies structure their repayment in bankruptcy. It is becoming more and more common for businesses to look at some type of repayment structuring as part of their Chapter 11 bankruptcy case, and if the trend continues it will be equally as important for creditors of all classes to know how they are being treated. We know how to help if you need to file bankruptcy, or if you have been affected by a filing.

For more information about bankruptcy, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.