I Need Answers For: Loan Modification Issues

Loan modification issues are a big problem in the United States right now, and many homeowners wait for several months only to find out that the modification application was denied and they are facing foreclosure. There are numerous complaints from homeowners who have been through the loan modification process. Common complaints include an inability to contact a mortgage company representative despite repeated attempts, documents are lost by the mortgage company, documents must be sent numerous times, and many others.

The truth is that there are no laws in effect regarding mortgage loan modification. These programs were voluntarily put in place by banks when the housing market fell and the publicity was enormous. The fall of the housing market caused many homeowners to end up owing far more than the home in question was worth. Mortgage lenders offered to modify loans at this time for 2 reasons. The bad publicity from the press caused fear that new regulations would be put into place and lenders would lose even more if homeowners who were underwater simply walked away from the home and allowed the lender to foreclose.

Can Bankruptcy Help With Loan Modification Problems?

Bankruptcy can help with loan modification problems in many cases. A chapter 7 filing will help eliminate debt and this can make it easier for you to meet your monthly mortgage payments. Credit card debt, medical bills, and many other types of debt can be discharged under bankruptcy and provide a fresh financial start.

Home mortgages are secured debt, because the mortgage debt is secured by the home that the mortgage covers. If the mortgage payments are not met then the lender can foreclose and take the home back. If your loan modification application is denied you could find yourself far behind on payments and looking at the loss of your home.

A chapter 7 bankruptcy case can eliminate many debts but your mortgage cannot be resolved without the loss of your home or payments so that the mortgage is brought current. If your home is foreclosed on then the bank may sell the property for very little, and you could still end up owing a large debt for the outstanding loan balance.

Where Can I Get The Answers I Need?

Professional bankruptcy lawyers can explain how filing for bankruptcy can help in your specific case. Banks are no longer willing to modify home loans in most cases and tend to drag this approval process on for many months. By the time you get a denial on a loan modification you could already be thousands of dollars behind in your mortgage payments. A better option is to contact an experienced bankruptcy attorney as soon as you start having financial difficulties. The bank is not going to take less if they can avoid it.

The bankruptcy attorneys at Richard West Law can provide a free bankruptcy and debt consolidation consultation to help you find the right answer for your unique debt problems and circumstances.