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To arrange for a free initial consultation with NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (800) 666-9743 or contact us online.

What Are the Pros and Cons of a Mortgage Loan Modification in New York?

Mortgage loan modification form with eyeglasses on top.

Applying for a mortgage loan modification is a big decision that could have significant implications for your family’s financial future. When you are considering your options for getting your finances back on track, it is best to take stock of the advantages and disadvantages. What are the pros and cons of a mortgage loan modification in New York?

For many homeowners struggling to make mortgage payments in Westchester County, Putnam County, Rockland County, and throughout the Hudson Valley, a mortgage loan modification may be just what they need to get their payments in order and keep their home, but it is always best to make an informed choice.

At the law firm of Michael H. Schwartz, P.C., we want our clients to make smart financial decisions that will benefit them and their families. As an experienced New York bankruptcy and foreclosure defense attorney, Mr. Schwartz has an extensive knowledge of all the options available to people facing foreclosure in New York. Loan modification is just one of them.

With that in mind, here are some of the advantages and disadvantages of mortgage loan modification in New York.

Pros of Mortgage Loan Modification

Two men discussing mortgage loan modification.For many struggling homeowners, a mortgage loan modification can be a smart financial decision. By changing the monthly payments you make, along with other terms, a modification can help you keep from defaulting on your mortgage. Here are some of the pros of mortgage loan modification in New York:

  • Lower monthly payments. Perhaps the most obvious benefit of a modified mortgage loan agreement is a lower monthly payment. Receiving a smaller bill each month can be a lifesaver, particularly if you have recently suffered a loss in income or taken on new expenses.
  • Lower interest rates. In some (but not all) cases, your lender may agree to lower your interest rate in your modified mortgage loan agreement. Securing a lower interest rate can be especially helpful when you are also reducing your monthly payment, as you will be paying over a more extended period of time, allowing more interest to accrue.
  • Getting a forbearance or reduction of previous interest. In some instances, your lender might agree to forbear (forgive) or reduce some of the interest you already owe on the principal. This is an attractive option for many borrowers to pursue because it can reduce the amount of money you currently owe the bank.
  • The security of a mortgage you can handle. Along with all of the tangible financial benefits of mortgage loan modification comes the feeling of security when you know your finances are under control. The stress of continually being financially unstable can take a toll on your mental health and personal relationships. Modifying your mortgage loan agreement to make it manageable can have a positive impact on almost every area of your life.

As you can see, there are many potential benefits to seeking a mortgage loan modification. Not all of these benefits will be included in every possible modified agreement, but an experienced New York mortgage loan modification lawyer like Michael H. Schwartz can help you understand what benefits are included in the agreement you’ve been offered and to seek a better deal if you are unsatisfied.

Cons of Mortgage Loan Modification

Man is feeling depressed on financial pressure.Despite the potential benefits, mortgage loan modification may not be for everyone. There are some important costs to understand before agreeing to any mortgage loan modification. Here are some of the potential cons of modifying your mortgage loan agreement:

  • Taking longer to pay off your debt. If you are paying off the same amount of principal with smaller monthly payments, it will take longer for you to pay off your home. If you are trying to become completely debt-free as soon as possible, a mortgage loan modification can make that goal harder to achieve.
  • Paying more interest over time. How much interest you eventually pay to your lender is a function of both the interest rate and the number of monthly payments you make before your debt is paid off. If you have agreed to a lower monthly payment without significantly reducing your interest rate, you may end up paying more money in total because you are paying interest for a longer time than you otherwise would have.
  • The foreclosure process won’t stop while you’re negotiating. Mortgage loan modification can eventually help you avoid foreclosure, but if the foreclosure process has already started, it will not stop just because you are in the middle of negotiating a new agreement. Mortgage loan modification is not an emergency quick-fix. If foreclosure is imminent, other options such as filing for bankruptcy might be more appropriate. You may want to speak to an Ohio foreclosure defense law firm or New York foreclosure defense attorney.

Even if you have concerns about some of the disadvantages, you might not want to dismiss mortgage loan modification as an option altogether. To better understand what a mortgage modification could mean for you and your family, you can schedule a free initial consultation with experienced New York mortgage loan modification lawyer Michael H. Schwartz.

Contact a Mortgage Loan Modification Lawyer in White Plains Today

If you are worried about defaulting on your mortgage, you need guidance to help you understand what you can do. White Plains bankruptcy and foreclosure defense lawyer Michael H. Schwartz is here to tell you that you have legal options. Whether or not a mortgage loan modification is right for you, an experienced New York bankruptcy attorney can help you fight the bank and increase your chances of keeping your home.

If you are at all at risk of foreclosure, time is of the essence. The sooner you get started fighting back, the better chance you will have of keeping your home. For mortgage loan modification, you will want to get the ball rolling quickly enough to avoid foreclosure, but at the same time, you should not rush and accept a new agreement that will be just as unfavorable to you as the last one was.

For more information on how Michael H. Schwartz, P.C. can help you secure the right agreement for your situation, contact us now.

Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.

To arrange for a free initial consultation with NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (800) 666-9743 or contact us online.

How Many Times Can You Modify a Mortgage Loan in New York?

Two men discussing mortgage loan modification.

For struggling homeowners, getting a mortgage loan modification can at first seem like a lifeline. Unfortunately for some, however, even the new, modified rate might be too much to pay, especially if further financial disaster strikes later on. I’m sure you want to know how many times can you modify a mortgage loan in New York.

If you find yourself in this position, you may be wondering if you can get a second or third modification. The question of how many times you can modify a mortgage loan in New York does not have a single answer, as it can vary from lender to lender. In theory, however, there is no legal requirement limiting how many times you can get your loan modified if you can get the lender to agree to it.

Getting your second or third mortgage loan modification may not be easy, but in some cases, it is certainly possible. An experienced New York mortgage loan modification lawyer can help you understand your lender’s requirements and convince them that you can make your payments given another chance at modification.

If you are considering another mortgage loan modification, White Plains bankruptcy and foreclosure defense lawyer Michael H. Schwartz is here to help.

Financial Trouble Again After a Mortgage Loan Modification

Man is feeling depressed on financial pressure.If you’ve already modified your mortgage loan once, you are probably familiar with the basics of the process. You and the bank sat down, either with each other, a mediator, or under the supervision of a bankruptcy court, and hammered out new terms for your mortgage agreement.

Your new agreement may include lower payments, less debt, and a different interest rate. Both parties probably expected at the time that these new terms would allow you to make your payments on time and keep your home.

However, circumstances change. Any number of factors can cause a person who was already down on their luck to no longer be able to afford even their modified payments, including:

  • Losing your job
  • Suffering a serious pay cut
  • Death of a family member
  • Unexpected property loss, such through a car accident or natural disaster
  • A sudden onslaught of medical bills after a serious injury or illness

When one of these or other disasters strike, there may be nothing you can do to keep making your modified loan payments. At the law firm of Michael H. Schwartz, P.C., we understand how easily a final straw can break the camel’s back when you are already struggling with your finances. If we can convince the lender that another modification will set you back on track, there is hope for keeping your home and securing you a brighter financial future.

Understanding the Terms of Your First Modification

No two mortgage loan modifications are exactly alike. The final outcome will depend on how much you owed in the first place, how much you thought you would be able to pay, and the specific policies of your lender.

If you find yourself unable to make payments after your first modification, you will have to dive into the terms of the agreement you signed. There may be built-in procedures for what happens if your payments get off track. There may be specific guidance about whether and how you can apply for a second modification.

If you are uncertain how to interpret these terms, Michael H. Schwartz, P.C. can help you understand what you agreed to and what your options are going forward. Whatever the specific terms of your agreement, if you want another modification, you will almost certainly have to apply for it like you did the first time around.

Persuading Your Lender to Cooperate

The hardest part of getting another mortgage loan modification will likely be convincing your lender to go along with it. If you got behind on your original mortgage agreement and then had more problems under the new one, the bank may want to give up on you and go ahead and foreclose on your house. It will probably take some serious convincing to get them to voluntarily agree to another modification or to even meet with another mediator.

This is where an experienced New York loan modification attorney can come in. Michael H. Schwartz can help you make a strong argument that you will be able to make payments if you are given another chance to modify your mortgage. Here are some examples of arguments you might make to the bank when seeking another modification:

  • Our company cut pay across the board, but I am still securely employed.
  • My income has not changed. I have simply been hit with high, ongoing medical bills after a serious illness.
  • After our first modification, it seemed like we could make payments, but my spouse’s sudden passing has left me unable to pay with my income alone.

These are just a few examples of specific scenarios in which a bank might consider taking another chance on you, although they would certainly not be guaranteed to do so. The primary task is to convince them that you are still bringing in a steady source of income large enough to support a new, modified payment rate. If your lender does not agree to another modification, you may find yourself in bankruptcy court to stop them from foreclosing. As an experienced bankruptcy attorney, Michael H. Schwartz will be ready to defend you there as well and to aggressively fight to help you keep your home.

Contact a Mortgage Loan Modification Lawyer in White Plains Today

If you are considering a second or third mortgage loan modification, you may be nervous about your financial future. Could you lose your home? Will you be able to get the bank into another new agreement?

You don’t have to face this scary time alone. Westchester County mortgage modification attorney Michael H. Schwartz can help you find the best option to fight back and keep your home. If you are looking to modify your mortgage in Westchester County, Putnam County, Rockland County or anywhere in the Hudson Valley, contact us now for more information on how we can help.

Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.

To arrange for a free initial consultation with NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (800) 666-9743 or contact us online.

What Is the Difference Between a Loan Modification and Refinancing?

Woman staring at the loan modification form.

If you are struggling to make your monthly mortgage payments, there are options available to you. While many people are familiar with the concept of refinancing their home, some are not aware that they might also be able to modify the terms of their home loan with their lender.

It is important to understand the differences between the two options and to consult with an experienced foreclosure defense attorney to select the one that is right for you.

What Is a Loan Modification?

If your mortgage payments are behind due to financial hardship and the mortgage payment is more than 31% of your monthly gross income, a homeowner may be eligible for a loan modification on their home.

A loan modification is an agreement that involves changing the terms of your loan on a permanent basis to lower the payment. During a loan modification, the interest rate is lowered, and the term of the loan can be repaid over a more extended period. In some cases, the principal can be reduced so that the home is not underwater, and payments are more affordable.

A loan modification may be the best option if you can no longer afford your monthly payment. Requesting a loan modification is sometimes the best option if you wish to keep your home, you do not want the bank to foreclose on your property, or you do not want to file bankruptcy.

To be eligible for a loan modification, you must be unable to make a mortgage payment due to economic hardship. You must complete a trial period to demonstrate that you can afford the new payment. You must also provide the required documentation (proof of income, tax returns) to the lender for approval.

The benefits of loan modification in comparison to refinancing is that it helps you get current on payments, the modification alters the existing loan terms, and the process does not incur any closing costs or additional fees. Loan modification is recommended for homeowners who currently have a significant financial hardship, already be late on their payments and are unable to qualify to refinance.

How Can I Refinance a Home Loan?

While a loan restructuring changes the terms of the original mortgage, a refinancing loan pays off the original mortgage loan by replacing your current loan with a new one.

Refinancing involves getting a loan with a different interest rate and term length. This may be a good option for borrowers who took out a loan when interest rates were higher, and now the rates have dropped. Refinancing allows the homeowner to lock in current, low interest rates and lower their mortgage payment, or make the same payment over a shorter amount of time.

Refinancing is generally only available to those who are current on their mortgages and have good credit. Refinancing is also not generally available unless the owner already has equity in the home. One drawback is that it has closing costs associated with a new loan. When looking to refinance, it is best to shop around for the bank that will give you the best terms and save you money.

Can You Refinance If You Have a Loan Modification?

Although loan modification allows you to change the terms of your existing loan, there are also refinancing programs that can facilitate the modification of your mortgage as well.

One option is the Home Affordable Refinance Program (HARP). This program facilitates refinancing for homeowners, even if borrowers are underwater or have little equity in their home. Through HARP, you could take out a new loan to repay your existing mortgage.

HARP is an option for homeowners whose mortgages are owned or guaranteed by Fannie Mae or Freddie Mac. Your loan must have originated on or before May 31, 2009. You must have a loan-to-value of more than 80% and be up to date on all mortgage payments.

If you are not eligible for HARP, want to refinance and had a previous loan modification, then these rules will generally apply:

  • You have made at least 24 mortgage payments since the restructuring occurred.  If a second mortgage exists that was restructured, the same period applies whether the mortgage is on a first home, a second home or an investment property.
  • If you are purchasing or refinancing another property that is separate from the property that has a restructured loan, a one-year waiting time is required to refinance.
  • If your previous loan modification contained a forbearance, the additional interest was tacked onto the principal balance of the mortgage at the time the restructuring was completed, or if there was forgiveness of the principal balance, it would be up to the lender to approve a loan for refinancing.

Additionally, lenders are required to report any modified or restructured mortgages on credit reports. Even if you didn’t have any missed mortgage payments, a restructured mortgage could be a red flag to potential mortgage lenders.

Contact a Loan Modification Attorney Today

If you are behind on your mortgage payments or are in danger of losing your home, New York foreclosure defense attorney Michael H. Schwartz can help. Our law firm has not lost a single home to foreclosure for any of our clients, and we have effectively assisted clients with keeping their property.

Our firm can communicate with mortgage lenders and effectively negotiate with them. Having an experienced attorney on your side means that you have an ally who is committed to helping you and is not looking out for the interests of the bank or mortgage lender.

The law firm of Michael H. Schwartz has provided legal representation to homeowners in Westchester County, Rockland County, Putnam County, as well as the Hudson Valley, and New York City for more than 40 years.  Contact us by phone or online for a free consultation today and let us help you keep your home.

Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.

To arrange for a free initial consultation with NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (800) 666-9743 or contact us online.

What Is a Loan Modification and How Does It Work?

Woman watching on her monitor the mortgage loan modification form.

In simple terms, a loan modification is just like it sounds.

It is a negotiation with your mortgage lender to create a new agreement that modifies the original terms of your mortgage. If you have a long-term inability to pay your mortgage, a loan modification could be an option if you wish to keep your home.

A loan modification typically involves contacting the servicer for the lender (the company that sends you the mortgage statements each month) and negotiate to lower the interest rate on your mortgage, which will reduce the monthly payment.

If you have arrears on your mortgage, a loan modification could also lengthen the loan, add the arrears and any past-due amounts out over time. This can also reduce your mortgage payments. This is known as “re-capitalization.”

Some loan modification programs will allow borrowers to go through “re-amortization,” which means artificially lengthening the repayment period for the loan, thereby reducing the monthly payment. The actual amount of the loan amount does not change, and the balance of the unpaid mortgage is put at the end of the mortgage.

A loan modification is different from a forbearance agreement. While forbearance provides short-term relief for homeowners who have temporary financial problems, a loan modification agreement is a long-term solution for homeowners who may never be able to repay their existing mortgage loans.

A loan modification may be an alternative to filing bankruptcy or going through a foreclosure. If a homeowner is facing foreclosure, it damages their credit, and they may not be able to buy another house for several years.

If foreclosure is a possibility, it is essential to get the modification process moving, as it might put a stop to the foreclosure before it starts.  Otherwise, you may lose your home before you have a chance to modify the mortgage.

Negotiating with the bank for a modification of your home loan can be an overwhelming process for many homeowners. You need an experienced debt relief attorney to assist you with this complex process of negotiation and fight for you.

Who Is Eligible for a Loan Modification?

Any homeowner with high combined mortgage debt compared to income, or an individual who is “underwater” (a combined mortgage balance higher than the current market value of the home) may be eligible for a loan modification.

To be eligible for a loan modification, you must do the following:

  • State why you cannot make your current mortgage payment due to some financial hardship.
  • Provide all required documentation to the lender for evaluation.
  • Complete a trial period to show that you can afford the new monthly payment.

Required documentation for a loan modification usually includes a formal application, pay stubs, financial statements, proof of income, bank statements, and tax returns, as well as a hardship statement.

How Long Does a Loan Modification Take?

Sometimes a lender or servicer will offer you a “streamlined modification.”

The servicer picks an amount they believe you can afford and that they will accept as a monthly payment, offer it to you and upon three successful payments, your loan is modified.

If the lender or servicer does not offer a streamlined loan modification, the process will depend on the mortgage lender, the ability to work through the procedure with your lawyer and other factors.  The loan modification process could take to 3-6 months.

How Does a Loan Modification Affect Your Credit Score?

Some lenders might report a loan modification as a debt settlement, and this may have an adverse impact on your credit.

If your credit score is already low and you are already behind on your mortgage, the impact to your credit may be minimal. But, if you have a high credit score, a reported debt settlement on your credit report could significantly impact your credit score. To protect your credit, you should ask your lender how they plan to report the modification to credit bureaus.

Once the loan modification is set, making timely payments will improve your credit since these payments will be reported to the credit bureaus. Eventually, your credit score will increase as each payment will build a solid credit history.

Why Do I Need an Attorney for Loan Modification?

Attempting to modify your mortgage is like a part-time job. The paperwork is exhaustive and not so easy to understand. Unlike applying for a mortgage, the servicer or lender will not assist you.   An experienced lawyer can guide you through the loan modification process.

There are also numerous situations where homeowners were led to believe that the bank was working with them on a loan modification and trying to help them avoid foreclosure, but the bank foreclosed on their property anyway. If your mortgage lender is pursuing foreclosure while also deciding on your loan modification application, or if they are in violation of federal and mortgage service rules, a lawyer can help you enforce your rights.

If the lender denies your modification request, you will need more time and assistance to appeal. An attorney can show why the loan servicer made a mistake in dismissing the loan modification application and may be able to push for approval of your modification request.

Contact a Loan Modification Attorney Today

If you are unable to make your monthly mortgage payments or are facing foreclosure, foreclosure defense lawyer Michael H. Schwartz, P.C. can help. His record speaks for itself.

Mr. Schwartz can communicate with mortgage lenders and effectively negotiate with them. Having an experienced attorney on your side means that you have an ally who is committed to your interests, not those of outside investors.

With over 40 years of experience, the law firm of Michael H. Schwartz, P.C. has provided quality legal representation to homeowners in Westchester, Rockland, Putnam County, the Hudson Valley, and New York City.  Contact us by phone or online for a free consultation today.

Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.

To arrange for a free initial consultation with NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (800) 666-9743 or contact us online.

What You Need to Know About the Mortgage Loan Modification Process

Foreclosure lawyer White Plains NY can help you

If you’re facing foreclosure, you’re probably looking for options – and a mortgage loan modification might be one choice on the menu.

In a mortgage loan modification, one or more of the requirements of a loan are changed so that the person paying the loan can more easily meet the terms. When a loan modification is made to a home loan, the result may be a payment you can continue to make, allowing you to keep your home.

There are multiple ways to seek a mortgage loan modification. Options include:

Voluntary Loan Modification

In a voluntary loan modification, the lender and borrower come together and agree on a change to the terms of the mortgage. Loan modifications may be governed by guidelines set by the U.S. Department of Housing and Urban Development (HUD).

To help your request for a voluntary loan modification succeed, you’ll need to demonstrate that your financial circumstances have changed, but that you still have enough money available to make regular payments if the terms of the mortgage are modified. An attorney can help you gather the necessary paperwork and present a proposal to the lender.

Mediation Process

If voluntary loan modification doesn’t result in an agreement, mediation may be the next step in the loan modification process. In mediation, you and the lender will sit down with a neutral third party – the mediator – in order to negotiate an agreement. Your attorney can assist you during mediation.

Mediation offers a more formal, focused structure than voluntary loan modification negotiations, but typically requires less time and expense than a trial. If mediation fails, options remain available, such as filing for bankruptcy in court.

Bankruptcy Court

Filing for bankruptcy allows you to stop the foreclosure process, buying you time while you work out a solution. As part of the bankruptcy agreement, you may be able to catch up on your missed payments, apply for a loan modification that is supervised by the bankruptcy court, or walk away from an “underwater” mortgage (a situation in which you owe more than the home is worth). A bankruptcy claim may also help you address other sources of debt, such as credit card balances and car loans.

New York bankruptcy attorney Michael H. Schwartz has assisted clients with more than 4,000 filings. Under his guidance, clients haven’t had a single discharge denied or lost a single home in foreclosure.

As one of the top-rated bankruptcy lawyers in New York, Mr. Schwartz can help you keep your home and preserve your future financial well-being. To learn more through a free case review, call (800) 666-9743 or send us a message.

Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.

To arrange for a free initial consultation with NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (800) 666-9743 or contact us online.