Mortgage Modification Information

I have been reading about loan modifications but now I'm confused. Are there different types of loan modifications?

Yes, there are currently many different types of loan modifications. Many people have heard about the HAMP program, because it is a federally backed mortgage modification program. However, even if you do not qualify for HAMP, you may be eligible for another type of loan modification.

Our attorneys can determine if you are eligible for a loan modification and if it is in your best interest. In addition, our law firm works with each client to find the right financial solution, not just a financial solution.

I live in Ohio and I have heard that there is now a moratorium on home foreclosures in Ohio. Is this true? Does this mean that if I'm having trouble paying my mortgage, I no longer need to worry about foreclosure?

As of early October 2010, some lenders (but not all lenders) in Ohio have temporarily suspended foreclosure proceedings. However, this moratorium is only temporary while these lenders review their internal foreclosure procedures. If you are having trouble paying your mortgage, now is the time to contact an attorney at Jump Legal to find out if you qualify for a loan modification. Read recent CNN Money article on foreclosures.

I have read that HAMP loan modifications have been expanded. How can I find out if there is a HAMP loan modification program for someone in my situation?

HAMP was recently expanded to include more homeowners including those who are unemployed as well as those who are employed but are experiencing financial trouble. Many people who were previously ineligible for loan modifications may now be eligible under the new programs.

Click here to view the federal government's publication on loan modification homeowner examples.

I have fallen behind on my mortgage payments. Can I still apply for a loan modification?

Yes. Borrowers may apply for loan modifications if they are current on their mortgage payments or if they are behind on their payments.

I have heard that many loan modifications are not approved. Why is that?

According to a recent JP Morgan Chase article, 51 percent of loan modifications are not approved - because of incomplete paperwork or paperwork that is filled out incorrectly.

On the flip side, many borrowers that we talk with tell us that they have been sending paperwork to their lenders and calling their lenders, but they still aren't making progress. It is often surprising to a client how much smoother the loan modification process becomes once an attorney is representing him or her.

What will a loan modification do for me?

Depending on the type of loan modification, a loan modification can lower your payments for the life of your loan.

Am I eligible for a loan modification?

Eligibility for loan modification varies by program and lender. If you live in Ohio, the law firm of Jump Legal can help you with your loan modification. To find out if you are eligible, contact our office at 614-254-5985.

Will getting a loan modification hurt my credit score?

A loan modification will not hurt your credit. If you are behind on your mortgage, then your credit may have been damaged and a loan modification may actually help you rehabilitate your credit. Further, loan modifications are available to homeowners who are not behind on their mortgage.

Is there a fee to meet with a Jump Legal attorney about loan modification?

There is no charge for an initial consultation to discuss loan modification with a Jump Legal attorney.

When should I apply for a loan modification?

If you are having trouble paying your mortgage each month, you should at least allow our law firm to evaluate your eligibility for a loan modification. It is best to contact our office (make a link) as soon as possible to get the process started.

Our online loan modification program allows you to jump-start the loan modification process. Click here to start.

After you submit your information, a Jump Legal attorney will quickly be able to determine if you may be eligible for loan modification and will contact you within 24 hours.

President Obama's Homeowner Affordability and Stability Plan offers a new streamlined loan modification program for many homeowners.

This plan may help homeowners who are:

  1. Behind or current with their mortgage payments
  2. Owe more than the fair market value of their home
  3. Paying more than 31 percent of income in mortgage payments
  4. Paying above market interest rates (Note: Interest rates modified to as low as 2 percent)

Even if you do not qualify for the Obama plan, you may still qualify for a number of other loan modification programs.

Foreclosure Mediation

For certain qualified individuals, a proven way to save their home from foreclosure and avoid bankruptcy is foreclosure mediation. Two methods of foreclosure mediation are most often used by our law firm.

  1. Forbearance agreement: Under this agreement, your mortgage lender will agree to forbear from foreclosing on your property so long as you make up past-due payments along with resuming regular monthly payments. Usually, payments will need to be approximately 150 percent of the regular monthly payments.
  2. Loan modification: In some circumstances, your mortgage lender will agree to recast the arrears (past-due payments) to the end of your loan. You must ultimately pay the monthly payments you missed with interest in order to pay off your loan; however, you are able to reinstate your loan by simply resuming the regular monthly payments.

Documents Required

For both a forbearance agreement and a loan modification, your mortgage lender will typically require the following:

  1. Verification of your source of income. Usually, 90 days of pay stubs. Of course, the reason you have fallen behind on your mortgage may very well be because you lost a job. Under that common circumstance, whatever pay stubs are available should suffice.
  2. Personal financial statement: Each lender has its own particular standard form financial statement; however, all lenders require you disclose your assets, liabilities and monthly debt service other than your mortgage loan. Your attorney will assist you in completing the personal financial statement.
  3. Letter of hardship: Your mortgage lender is interested in how you became behind and what change in your personal or financial affairs will allow you to make your mortgage payments in the future if given a second chance.

Recent Developments

Administration Releases February Loan Modification Report - Number Of Permanent Modifications Increases By 45 Percent
March 12, 2010

WASHINGTON - The U.S. Department of the Treasury and the Department of Housing and Urban Development (HUD) today released February data for the Administration's Home Affordable Modification Program (HAMP). As of the end of the month, more than 1 million borrowers were receiving a median savings of $500 each month - a 36 percent median monthly payment decrease. Permanent modifications have been granted to 170,000 homeowners, and an additional 91,800 permanent modifications have been approved by servicers and are pending only borrower acceptance.

The February HAMP report can be found here.

HB 306 Requiring Mandatory Mediation In A Foreclosure Filing Was Introduced On Tuesday, Oct. 6, 2009, In Columbus

COLUMBUS, Ohio - With a foreclosure moratorium bill stalled in the Ohio Senate, a House lawmaker from Northeast Ohio is pitching an alternative approach that he hopes can gain bipartisan support.

State Rep. Matthew Dolan, a Russell Township Republican, rolled out his bill Tuesday, which would force borrowers and lenders to turn to mediation before a foreclosure action can be filed.

Demanding that parties come to the bargaining table is a far different approach to helping stem the tide of foreclosures than a bill passed by House Democrats on May 20. That bill would block all foreclosure filings in the state for six months.

Dolan hopes his legislation, which also is expected to be introduced in the Senate by Sen. Shannon Jones, a Springboro Republican, can gain momentum among Senate Republicans and become that chamber's vehicle for action on the issue.

Right now, court-ordered mediation programs are voluntary and must be requested by the borrower. "A lot of times borrowers are scared to engage with the court system," Dolan said. "But where they do, it's working."

Senate Republicans have shown little interest in the Democrats' moratorium bill, shelving it since it passed the House. Sen. John Carey, a southern Ohio Republican who heads the Finance Committee, where the moratorium bill is being considered, said calling timeout on all foreclosures is the wrong approach.

"I think it has the possibility of making things worse," Carey said. "It may put people being foreclosed on in a deeper hole and seems to have a negative impact on the foreclosure process in terms of working things out."

Carey hasn't been briefed yet on Dolan's legislation, but said he's open to discussing alternatives to the moratorium measure.

State Rep. Michael Foley, a Cleveland Democrat who is the chief sponsor of the moratorium bill, said his measure would force lenders to pay higher fees for filing foreclosures once the ban is lifted. Those higher fees would be funneled to community housing groups that he said are far more effective at getting results than Dolan's plan.

"Mediation in some cases can be good, but it's kind of ineffective," he said. "You're usually not getting decision-makers into the room."

But Dolan said the bill will bring decision-makers to the table.

"It's going to be somebody with the authority to settle," he said. "This can't just be somebody coming in and paying lip service to the idea."

House Speaker Armond Budish, a Beachwood Democrat, said he's disappointed the foreclosure bill has stalled and said Senate Republicans need to act on a critical problem in Ohio.

"We passed months ago a very good foreclosure bill, and I'm very disappointed that it has not seen the light of day over in the Senate," said Budish. "I hope they will pull that out of the mothballs. We are in a situation where there is a crisis, and something has to happen."