THE government announced last week that it was extending the application deadline to apply for relief under MHA (Making Home Affordable Program) but only through December 31, 2015. Thus, for homeowners who are still struggling to keep their homes due to unaffordable mortgage payments, this presents a limited-time opportunity. Home values are also starting to go back up. The best time to apply for a loan modification is when values are down and lenders are much more willing to do a loan workout instead of foreclosing on properties which is often their last option.
Lately, my office has been flooded with phone calls from people who need help in getting their mortgage loans modified. While some of these are first-time applicants, a lot of them are actually people who have already applied before, some more than once or twice- but they were either denied or were approved. Somehow, for the ones who were approved, a change in circumstances has again resulted in a default on the modified loan. So a lot of people are asking: If I’ve been approved once, can I re-apply? The answer is YES, provided that you can prove to your lender that an unexpected hardship has caused you to be late on your mortgage payments again and that you currently meet the program requirements. Of course, situations vary and some lenders will only allow a limited number of applications within a certain period of time but the fact that you’ve applied more than once should not stop you from at least finding out if you can reapply because in a lot of cases that I see, you certain can.
Homeowners who do not meet the guidelines under HAMP will sometimes qualify for a traditional loan modification. Most lenders have their own version of HAMP which is nothing more than an in-house program provided by the lender. Since 2009, more than 1.6 million homeowners have applied for relief under HAMP and it is believed that nearly 1.3 million people have been helped by the program. These figures are better than what was first reported in the first two years of the program and lately, government guidelines and regulations have actually streamlined the process thereby making it easier for homeowners to get much-needed relief. In one of the cases my office handled recently, I was surprised to get an approval from the lender only after a week of submitting the application! Most, of course, are still taking several months to process but this is nothing compared to the length of time (sometimes more than one year) that we usually had to wait when the program was in its infancy. I find that lenders these days are more responsive and more reasonable to deal with.
In some cases, loan modification may not be your best option if you are trying to save your home as there may be better options available depending on your circumstances and your ultimate goal with regard to your property. For example, Chapter 13 can stop a foreclosure immediately if you are running out of time and/or if you are trying to cancel a second mortgage if your property is “upside-down”. In some cases, it is also possible to negotiate with the second mortgage holder and pay them as low as 8-10% of the original amount and get them to release their lien on the property. Don’t be hasty in trying to do a short sale without consulting with an attorney first. Your friendly realtor is rarely your best source of advice. He or she may be sincere in trying to help you but no one can analyze all the legal aspects of your case other than an experienced and knowledgeable attorney.
Call my office to schedule an appointment with me and I can explain to you how all of the above options work. Please call Toll-Free 1 (866) 477-7772. We have offices located in Glendale, Cerritos, West Covina and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.