Despite the reporting from many media outlets regarding the soundness of the economy, many New Jersey families are still struggling. Although the “foreclosure crisis” has appeared to ease in recent years, I am finding that many New Jersey homeowners are behind with their mortgage payments. There is way to change this without having to resort to a bankruptcy filing. The solution is referred to as a loan modification.
A loan modification is a process one undergoes with his or her mortgage company. This process can take anywhere from a few weeks to several months to complete. This process can be done with the aid of an attorney or on one’s own without the presence of legal counsel.
Initially, the mortgage lender needs to be contacted in order to obtain the lender’s version of a Uniform Borrowers Assistance Application. Many lenders will use the standard application while others utilize a variance of the standard application. Oftentimes, one can locate and print out the application directly from their lender’s website.
The application needs to be fully and properly completed and executed where noted. This is a very specific and detailed process so if you decide to undertake this on your own, be sure to proceed slowly and cautiously through the application. I have witnessed people having an entire application considered incomplete due to a single box failing have been checked off.
Along with the application, numerous documents must be presented to the mortgage lender. Loan modification “packages” that I put together include the following items:
- Dodd-Frank Certification;
- IRS form 4506-T;
- 2 months of all open bank account statements;
- 2 months proof of income from all working adults within the household;
- 2-3 recents utility bills;
- Social Security Award letter, Pension or disability statements (as applicable);
- Quarterly Profit & Loss statements (As applicable) and
- Signed & dated hardship letter.
If you decide to embark on this journey alone, you must be prepared to follow up with the lender each and every week unless specifically advised otherwise by the lender. These calls can be frustrating and timely but they are necessary.
If you are fortunate, the lender will offer you a three (3) months trial modification. You will be provided with an exact amount you are to pay along with the due dates of all three (3) trial payments. Assuming you make all of the payments in a timely fashion and in the proper amount, you will be offered a permanent modification to your existing mortgage. At the completion of this process, you will no longer be in arrears concerning your mortgage and any foreclosure proceedings will be dismissed with the court.
At the law firm of Reinheimer & Reinheimer we have been successfully navigating the loan modification minefield on behalf of our clients for many years. With the handling being performed by our efficient and well-versed office, you can continue to proceed with your everyday life while we wrestle with the mortgage lender. You are kept in the loop throughout and we advise you of the sum and substance of every communication we have with your lender.
At the end of the day it is important to know there is a way to save your home from foreclosure without having to walk into a bankruptcy proceeding to do so.