During the month of July, we have experienced a large increase in lender modifications and principal reductions in my firm. While certain loans and lenders will still refuse to make them, if they are Fannie Mae or Freddie Mac backed loans, the majority of the lenders are truly stepping up to the plate and granting loss mitigation options in record times. Which one is right for your particular situation truly depends on a variety of factors.
A loan modification under the Making Homes Affordable plan will require the borrower to meet strict guidelines set by the lender and the government in order to qualify for a 2% interest rat and possible principal reduction. The borrower must have substantiated income and must meet the NPV test.
For a short sale, the borrower has to have the opposite financial statement then that required for a loan modification. While the guidelines have been loosened a bit and the restrictions less tight, the borrower will still need to meet certain guidelines and provide a substantiated hardship.
A short payoff consists of negotiating with the lender to write off the bulk of the loan and accept a lesser amount, sometimes as low as 10%, to cancel the mortgage debt and issue a satisfaction of mortgage. The key to this is to make sure that the attorney negotiating on your behalf has done his or her homework, has prepared a report on comps, has the values of the loans and equity presented to the lender, and has reviewed all loan docs, mortgages, assignments, etc. to find any leverage in order to settle for the lease amount possible.
Then there is the deed in lieu, that gives the title of the property, or deed, to the lender in exchange for a write off of the debt.
These are only a few of the many options available to homeowners that are upside down on their mortgages.
At the Law Office of Jacqueline A. Salcines, PA, we start off with a free consultation to review your financials, speak to the borrower to see what they want to do with the property and then figure out with the information provided and our sophisticated financial programs, whether the option is possible. If not possible, then we can elect another option that is right for you. The key is to avoid a foreclosure auction or sale of the property, and most importantly to avoid a foreclosure judgment.
If your home is underwater or you simply can not continue paying your mortgage, call me today to discuss your options. Or call for an appointment to sit down with me, Jacqueline A. Salcines, Esq. The consult is always free of charge.
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LAW OFFICES OF JACQUELINE A. SALCINES, PA 706 S. DIXIE HIGHWAY SECOND FLOOR CORAL GABLES, FLORIDA 33146 TEL: 305 | 669 | 5280 EMAIL: J.SALCINES@SALCINESLAW.COM