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If you have fallen behind your mortgage payments on your house or investment real estate or if you are already in foreclosure, negotiating a loan modification with your lender may be a prudent solution to normalize the situation and retain the property. Under the federal government loan modification programs available to homeowners and banks’ in-house loan modification programs available to both homeowners and real estate investors, it may be possible to lower the regular monthly payments and, in some instances, reduce the outstanding principal amount while bringing the loan current. Banks often prefer to work-out a delinquency in a way that is beneficial to both the bank and to the borrower because they do not want to maintain a bad loan account for the reasons we briefly explained under description of our Loan Settlements area of practice.

A loan modification process is not easy. Most lenders have arduous requirements and most loan modification programs are relatively complex. On top of it, the entire process is usually lengthy and dealing with lender’s representatives may be extremely frustrating due to their bureaucratic procedures and approach. Loan modification requests that are not planned correctly from the beginning and executed perfectly are doomed to fail. At The People’s Advocates we have not only legal but also financial acumen to increase your chances of successfully obtaining a desired loan modification. Please contact our office at (847) 954-2300 or email us at [email protected] for a free and strictly confidential consultation regarding a potential mortgage loan modification with one of our experienced attorneys.

Loan Settlements

If you are delinquent on your second (or junior) mortgage secured by a real estate and the value of that real estate is lower than the total of the outstanding principal balance of all mortgages, you may be a good candidate for a loan settlement in which a repayment of a second (or junior) mortgage for cents on a dollar may be possible. Many banks will be able to accept a payoff of their loan and release their junior mortgage at a substantial discount because it is the best possible outcome in their situation.

A delinquent mortgage is a problem not only for the borrower; it is a serious problem for the lender as well. Every delinquent loan account simply is a bad asset on lender’s balance sheet and it negatively affects lender’s financial statements and financial position. Also, delinquent loan accounts may cause difficulty for some financial institutions to maintain capital reserves desired by their shareholders or required by the government regulations. That is exactly why some lenders prefer to write off delinquent loan account as a total loss or sell it to a third-party investor for a few cents on a dollar than to hold on to a bad loan account where a chance of resolving the situation in a short term is low.

Don’t let your lender sell your loan secured by a second (or junior) mortgage for cents on a dollar to a third-party vulture investor instead to you! At The People’s Advocates we can negotiate for you that payoff at a substantial discount with your lender.

ADVICE ALERT: If you are not delinquent on your second mortgage but the term of your loan will end in the next few months or even in the next couple of years and you may not be able to refinance it with the same or any other lender because the value of your property or your credit rating has declined, we advise that you proactively look into this option of a loan settlement instead of waiting until the very end.

ADVICE ALERT: Even if you discharge your debts, including your second mortgage, in bankruptcy, we advise that you consider whether you should engage in a loan settlement negotiation with your bank. The bankruptcy discharged your personal liability for the loan but likely did not affect the mortgage itself, which still encumbers the title to your property. A loan settlement with your lender may be the best way to release the mortgage, so that you own your property free and clear of that lien.

Just like a loan modification process, the loan settlement process is not easy. The lender’s requirements usually are arduous and complex, the process lengthy and dealing with lender’s representatives may be extremely frustrating. A loan settlement request that is not planned correctly at the outset is likely doomed to fail.

At The People’s Advocates we have not only legal but also financial acumen to increase your chances of successfully obtaining a desired loan settlement. We have successfully represented clients in loan settlement matters with large financial institutions like BMO Harris, Citibank, JPMorgan Chase, PNC Bank and their affiliates, as well as with smaller local financial institutions. We have dealt with some of these banks so many times that we know some of their representatives, which not only makes negotiations easier on a personal level but also allows us to anticipate their approach and reactions.

Please contact our office at (847) 954-2300 or email us at [email protected] for a free and strictly confidential consultation regarding a potential mortgage loan modification with one of our experienced attorneys.