So, the economy has taken its toll on you. You are not alone. Millions of Americans are now faced with the prospect of losing their home.
Perhaps you've been laid off, cannot make ends meet or simply can no longer afford your mortgage. Even if you are already way behind on house payments and the road ahead looks bleak, there is still hope. Put the doom and gloom aside. Below, I will explore two great strategies that can save your home.
First -- Examine your mortgage. You must engage in a thorough examination of the entire transaction that led to your current mortgage. I am literally talking about every document, conversation and promise that transpired between you and the lender, from the moment the bank took the loan application.
I meet with many people that are late on their mortgage payments. After receiving some focused legal analysis, they are often very surprised on what a bad job their lender did in properly disclosing and documenting the terms and conditions of the loan. They are often the victims of broken promises and poor business practices.
Lenders must comply with a maze of federal and state laws related to loan disclosures. They often fail in several key areas. The bank's failures are wins for you, the borrower. Broken promises and/or the failure to properly disclose key loan terms mean that you may have the right to rescind or cancel the loan. This right to cancel even exists years after the loan was made.
What does this mean for you? If the lender did not do its job, you get to cancel the loan. And, you may even get a new loan at better terms from the lender. Yes, you get to save your home - based on legal technicalities. And, you'll get a new loan from the lender, even if you are in default or foreclosure on the old loan.
Did you forget to save all the bank's paperwork? Don't worry. You had no duty to hold on to all the loan documents. However, the lender does have this duty. A good attorney will be able to demand and review your loan file, conduct a thorough examination of all crucial documents, and evaluate whether there are legal attacks that can be made to save your home. The key is to find a mortgage lawyer who knows vital elements of federal and state laws so that you can use them to your advantage.
Second -- Mortgage Modifications. This is a legal mechanism to lower your monthly loan payments. Yes, your bank may give you a lower payment, even if you are already in default or foreclosure. The key is that you must prove that you can afford your home, but that you cannot afford your current mortgage.
President Obama recently announced a federal plan for lenders to reduce mortgage payments for millions of Americans. The government will pay the banks to help you save your home. This means your lender will actually be compensated to lower your monthly payment to not exceed 35% of your monthly income. This is a great program that is estimated to save the homes of at least 7 million Americans.
This strategy requires a bit of work. The burden is on the homeowner to document their income, monthly debts, financial hardships and ability to meet the lower payment obligation. The good news is that homeowners are successfully obtaining these loan modifications each and every day.
Beware of scam companies charging up-front payments to help you modify your loan. The vultures are circling. These companies are charging large fees without the promise of success. Some charge 3-5% of your mortgage balance to help you modify your loan. Outrageous.
Unfortunately, going it alone is not the best option either. Banks are so busy that they are routinely ignoring new requests for loan modifications. The best strategy is to hire a skilled mortgage lawyer. He or she will be familiar with the best approach to use with each bank, and will know how to put together a compelling package and argument for a loan modification. Only an attorney can act as an advocate for you.
Mortgage modifications will save the homes of millions of Americans this year. This is your opportunity to make your home affordable again. Play it smart, build your case and document that you can afford your home at a new and lower payment. The bank just may reduce the amount of your debt, cancel a second mortgage, and extend your loan term. Any of these may be just enough to keep you in your home.
David K. Stein is a mortgage injury lawyer in Columbus, Ohio and is Senior Partner of Stein Chapin & Associates, LLC. For a free case evaluation go to David's web-site www.steinchapin.com. David has represented consumers for 19 years and is licensed to practice in Ohio and Florida. E-mail David at dstein@steinchapin.com.
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