Life, unfortunately isn’t always full of brightly colored rainbows and delicate butterflies and we might end up finding ourselves in a position where we are unable to pay our mortgage and fear the potential of facing the Foreclosure process. While it is believed that this process comes and goes with no possible way out you often don’t think that you will need any legal help, however, that isn’t necessarily the case. By using an experienced team of lawyers you will be able to look into multiple difference options that are available to you as well as discuss in detail and ultimately decide which option is the best fit for you and your family. Mortgage Mediation, Mortgage Modification, Short Sales and even Bankruptcy are all options when you are facing a Foreclosure.
Fighting battles alone can often lead to success, although the chances may be slim, but when you have people fighting along side you, you have a better chance of winning. The main thing to understand is that your options are not limited. As individuals, we are scared of the notices we may see being plastered to the front door of our home, however, one thing to cling to is that many of these notices are simply scare tactics and aren’t legally able to advance the process whatsoever. By hiring the right team to support you, you will be able to fully understand what notices to look for, what notices are just scaring tactics, and what each notice means and how to proceed. Don’t let the multiple notices on your door fool you and discuss each notice with a professional so you are fully knowledgeable and aware of how the processing is accelerating and at what speed.
There are three different notices that will be posted that you will need to keep an eye out for:
Notice of Pre-Foreclosure Options, Notice of Default, and finally, Notice of Trustee Sale. Notices with any other titles will not hold a legal merit and will likely be there as an attempt to make the process go faster by your foreseeable forfeit of your home. To ensure you stay ahead of the game, contact legal professionals before these notices are posted when and if at all possible. You will be aware if your mortgage payments haven’t been made so contacting a legal team before the process starts will allow you to have more time to discuss the processes and ask questions so that you don’t feel rushed once the ball starts to roll.
[Related Post: The Difference Between Selling to an Investor VS. with an Agent]
Not only will you be able to ask questions, get answers and have a team fighting for you but you will also get the best representation during your Foreclosure. Stay on top of the game and be ready to catch the curve balls that are thrown your way. Facing Foreclosure is not the end and it is most certainly not the only way to resolve the problems you are facing. If you are in Seattle, Bellevue, Tacoma, Everett, King County, Snohomish County or Western Washington, click here to get in contact with the lawyers that are standing by to assist you.
Having a great team behind you is important if you are planning on avoiding a foreclosure but there may be other options. Having an investor buy your home outright may also be a viable option. – Thank you to Peter Westbrook REI for our guest post this week. Peter buys properties as-is in any condition throughout northern California.
The care of your loan is much more complicated than it appears. To some, this may sound funny because many of us do not think of a mortgage as simple on any level. Usually when making your monthly payments you only deal with the servicer. They are responsible for taking payments, crediting the accounts, and taking the steps for foreclosure if the loan is in default. There is another party involved party involved in your loan you may not be aware of.
This other party is generally invisible to loan holders because they do not communicate with you. This silent party has the biggest stake in what happens in your mortgage and that is the investor. They own the mortgage and earn profit on the interest paid. Many homeowners don’t realize there is another party involved with the mortgage until there is a financial hardship and payments have not been made when the servicer relays information that the investor will not allow a modification.
So why would an investor deny an attempt to make a new payment agreement through modification?
The modification of a loan requires the permanent change of one or more of the loan terms. Some of those changes may come in the form of lowered interest rates, longer loan terms, principal reduced, and lowered monthly payments. All of these things can mean less money for the investor.
Usually when an investor denies the request for modification it is because they believe they can make more money if they foreclose on the loan instead of modify. Making money is the reason the investor owns the loan and it is strictly business so they are going to look for the option to make more money.
If you have a Fannie Mae or Freddie Mac loan or your lender is another GSE they are required to let the servicer consider you for the government’s Home Affordable Modification Program more popularly referred to as HAMP. Other big banks that received government funds in the big bailout are also required to consider homeowners for HAMP.
Private investors, however, can play by a different set of rules and it can be more difficult to get a modification from them. They are not bound to the government requirements so when and if they give a modification it can be less helpful.
What can you do if your mortgage investor has denied your loan modification?
Get the help of an experienced attorney that deals in loan modifications. Usually when you speak with the servicer you may be speaking with someone that does not know all the programs available out there or your rights as a home owner. There is so much information to know about the modification process and the best thing you can do is to have an experienced loan modification attorney on your side who knows all the information and can help you get the best results.
Being denied a modification does not have to be the end of your attempt to stay in your home. You can reapply after rejection. For more information on how legal representation can help with your modification please contact the team at Advantage Legal Group.
Check out this week’s video blog:
Protecting funds in a bank account is often a top priority of those filing for Chapter 7 or 13 bankruptcy. The effect that bankruptcy will have on any money deposited into your personal bank accounts is dependent upon if the money has been protected by a bankruptcy exemption and the amount of pre-bankruptcy planning you were able to do to protect money that is not exempt in the bankruptcy process.
Pre-bankruptcy planning is common and legal, it is sometimes referred to as asset conversion. Though it may sound like it is something sneaky asset conversion is a method used to re-organize any assets and keep as much property in your hands and out of the reach of creditors as possible. The way to do this with bank account funds would be to invest any amount over the exemption amount in exempt assets.
While it is perfectly legal to convert non-exempt property into exempt property it needs to be done in “good faith” and the law does not allow someone filing for bankruptcy to hinder,delay, or defraud creditors. You need to be extremely careful when converting bank account funds to exempt property because determining the good faith of your asset conversion is tricky and while courts recognize asset conversion as legal a small amount of courts recognize pre-bankruptcy planning as ethical practice.
Read more: Should I Even File Bankruptcy?
Forms of allowable pre-bankruptcy planning that do not send up red flags in court include: paying down your mortgage in states with large homestead exemption, making an annual contribution to your retirement account, IRA or other exempt pension plan as defined by your state exemption list, purchase exempt personal property like cars furniture and clothes according to state exemption amounts, purchase of life insurance, pay down nondischargable debts like taxes, student loans, alimony and child support.
If a court finds that you have attempted to defraud creditors with asset conversion it could impose civil or criminal penalties. Courts will look at factors such as misrepresenting asset values, investments made were worth less than money spent, family or close friends were involved in property purchases, a radical change in lifestyle.
There is another thing you can do to protect finds in your bank account. If you owe the bank or credit union you have an account with money at the time you file for bankruptcy, for example if you have taken out a mortgage or car loan with them,they have the right to “set off” any debts owed to them with any bank account funds you have in their bank. They have the right to do this at anytime regardless of a bankruptcy claim. Banks rarely use “set off” rights but it is still a good decision to take every precaution and think of every likely scenario before filing for bankruptcy.
Bankruptcy laws are very different in every area and it is impossible to know the best way to protect accounts and what measures you should take without an experienced lawyer. If you are considering filing for bankruptcy please contact the team at Advantage Legal Group.
Surprisingly most people in Washington state don’t even realize that they can qualify for mortgage modification or mediation. Mortgage payment each month is causing you more and more stress or you’re simply not able to make the payment, there are options. Washington state has Washington state Foreclosure Fairness Act, which was implemented several years ago helps Washington homeowners modify their existing mortgage in order to stay in their home.
Like to stay in your home there are options but there are also qualifications. Banks will not tell homeowners that there are options often times considered a better “dirty little secret”. Banks have not financially incentivized homeowners to modify their loan in most cases, and this is where a mortgage lender needs to come into play. Homeowners cannot modify their own mortgage unless the letter asking for a straight refinance. Often, homeowners that are already struggling making their mortgage payment cannot qualify for refinance. This is where attorneys such as Advantage Legal Group can come into play. Attorneys or housing counselors must modify and mediate the mortgage refinance or modification on behalf of the homeowner. This really is the only caveat and can be difficult for a lot of homeowners to understand. Often get asked why they cannot simply go to their bank and ask for modification on their own. But with Washington State Foreclosure Fairness Act, there is a moderator on behalf of the homeowner that can handle and facilitate the moderation between the homeowner and the bank.
The downside is that the only way to qualify is to actually stop paying your mortgage. While this is often the case for a lot of homeowners, some may find it difficult to do so without food and utilities in order to make the mortgage payment. This is where the moderator needs to step in and provide alternate options. Once the homeowner is unable to pay and this is a payment, they can trigger event under the current law which provides the homeowner an option to elect to enter into mortgage mediation. The homeowner will receive the “Notice of Pre-Foreclosure Options” and after this will have 30 days to respond to elect to request a meeting with the bank in order to discuss the situation however, this must be done with a moderator as in a housing counselor or attorney. You can meet with the bank on your own but homeowners cannot request mortgage mediation by themselves. This mediation can only be requested through a HUD counselor or mortgage mediation attorney.
(See How Advantage Can Help You)
In order to qualify the homeowner must complete the package for loan modification including submitting paycheck stubs, budget, documents that the loan servicer requests and a hardship letter stating why you are unable to make their mortgage payment.
The property must be the primary residency, meaning it cannot be an investment or rental property.
Homeowners to choose modification if they are unable to refinance. Allows a temporary briefing room to get through financial hardship.
Homeowners must also have adequate debt to income ratio. Lenders prefer as low as 36% but can go as high as 45%.
If you’re concerned you may not qualify contact Advantage Legal Group today to discuss your options! You might be surprised at how affordable a mortgage modification really is, even through an attorney. And of course, you’ll have the peace of mind knowing you can keep your home.
Advantage Legal Group is in the business of helping people that are in financial distress either modify their existing mortgage, refinance or find a way to mediate between the lender and the homeowner. We get asked quite often if homeowners can refinance after a mortgage modification.
A mortgage modification is typically handled between a housing counselor or a qualified attorney and the homeowner and lender. The homeowner cannot go to the lender directly and ask for this mediation but must do so with a housing counselor or lawyer. This is where Advantage Legal Group comes into play. We talk to the lenders for you and make them come to the table to discuss options to either lower your mortgage payment permanently or for a short amount of time. We can modify your existing term, save you thousands and get you caught up on any past mortgage payments.
Often times we get asked if people can refinance after they’ve already had a mortgage modification. Refinancing may not have been an option initially but now that they have dealt with the modification for several months they may want to refinance. Some homeowners that have gone through the Home Affordable Modification Program may now want to refinance to a permanent lower rates. With rates continuing to creep up this is not a bad idea.
In order to qualify for refinance after modification you must have made at least 24 monthly mortgage payments consistently since the modification was completed, not since you’ve applied. If there was an additional second mortgage in place that waiting time qualifies. If you’re purchasing or refinancing at different property that did not undergo the modification you only need to wait one year.
All of these qualifications still apply whether you’re refinancing or buying a new home. You can’t modify a mortgage and then sell that home in the next two months. You must make consistent payments for at least 12 or 24 months depending on your situation before your allowed to refinance or apply for a new loan. Of course you can sell the property but you cannot apply for a new loan after that particular waiting period.
Feel free to view our video below on mortgage mediation and how Advantage Legal Group has helped hundreds of Seattle area residents keep their homes and lower their mortgage payments by refinancing or mortgage mediation.
Refinancing, buying a new home or mortgage modification definitely is something to be discussed with a lender or qualified housing counselor or attorney. For more information contact Advantage Legal Group and thank you to our guests blogger this month Tina Droessler. Tina is an expert real estate professional in Palm Desert and helps dozens of homebuyers and homeowners each year find or keep the home of their dreams.
The number or foreclosure listings in Washington State and all over the country is on the rise again, but there is hope as many home owners have made it possible to hold on to their home through the Washington State Foreclosure Fairness Act.
The Washington State Foreclosure Fairness Act is little known by both home owners and employees of mortgage holders. To have this protection work for you it is best to hire an attorney.
What many home owners are unaware of is that there are many different modification programs they may be able to qualify for. These programs include the HAMP Tier 1, the HAMP Tier 2, the HAMP Standard, FHA Modifications, VA Modifications, Non GSC Modifications, modifications that mirror HAMP, internal modifications, the National Settlement Act, Washington State Settlement with pick a payment programs and much more.
There are many lawsuits against banks in the courts today for failure to adhere to these settlement programs. The problem lies with banks not telling home owners about these programs or not even considering homeowners for these many various modification opportunities.
It is very important to know where the mortgage on your home stands and who is the actual owner of the loan on your home. Many people are unaware that the bank processing their payments may not actually own the loan. Where your loan is actually owned determines what modification programs you are eligible to apply for.
The Washington State Foreclosure Fairness Act allows a counselor or lawyer to work on your behalf to stop the foreclosure process while you try to apply for a qualifying loan modification.This law allows for a slow down of 6 to 9 months on the foreclosure process and gives time for legal help to find who owns the loan and just what programs you qualify for and your rights as a homeowner.
It is impossible to make any headway with the Washington State Foreclosure Fairness Act on your own as the program is set up for you to work through a housing counselor or attorney. The program sets up a series of mediation with the county through the Washington State Dept. of Commerce.
In many cases you can lower your payments through a qualifying modification program. In some cases payments may go up but interest rates can greatly lower without extending the term of your mortgage. Each case is determined by the income of the home owner.
If you are facing foreclosure and feel unheard please contact Advantage Legal Group immediately! We offer free consultations. Don’t settle for the bank telling you you will have to short sale or settle for a deed in lieu. Let us take a look at your case or free first.
If you have no idea where to start with mortgage mediation and you’re on the brink of losing your home, there are options and steps to take immediately in order to save your home and reduce your mortgage.
Many people may not even know about the Washington State Fairness Act. This is largely due to the fact that banks and lenders won’t tell homeowners their rights and options and simply let the home fall into foreclosure.
Most banks want to push foreclosure out beyond the first of the year so over the last 6 weeks many of these notices have gone out, more than 3 times the amount we saw in summer. For those that are receiving I notice now they will be foreclosed on until February or March. This is because lenders don’t want to be the bad guy around the holidays. The Washington state fairness foreclosure act forces banks to come to the table with the assistance of an attorney or a housing counselor in order to modify or mediate the current mortgage. Not even the state will inform people about it because they just don’t have the money to advertise this law, so many homeowners lose out on their home when that could be saved the mortgage mediation.
Banks, housing counselors or bankruptcy attorneys negotiate to find some way that the homeowners can stay in their home and this is usually through mortgage modification. At Advantage Legal Group, many people have Artie tried to do this on their own and without a qualified housing counselor or bankruptcy attorney legally cannot be done. You must have one of these two mediators with you when negotiating with the bank according to the fairness act.
When you enter into mortgage modification you can save the homeowner hundreds if not thousands of dollars each year. One of the most recent examples was an Ocwen loan where the original payment was $2087 at an interest rate of 4.65%. Advantage Legal Group was able to negotiate a new payment of just $1100 at a new interest rate of 3.375%. This helps people to become current on their mortgage again and save their home.
Even if we can’t lower the payments significantly we sometimes can negotiate a lower interest rate. One recent loan through Bank of America with an FHA loan with an interest rate of 6.275%. Advantage was able to lower that to 2%.
If you’re struggling on what to do first, simply call Advantage Legal Group. We offer free over the phone consultations to find out if you qualify for mortgage mediation. If you’ve been told that you don’t have the right paperwork or documents or simply do not get a response from your lender, it’s time to make the move and contact a mortgage mediator or housing counselor necessary and required in order to negotiate your mortgage payment.
Advantage Legal Group is that helping people for four years with the Washington state Foreclosure Fairness Act. It is helped many homeowners stay in their home and avoid foreclosure by forcing these banks to have face-to-face communication with the homeowners. These meetings are mediated and overseen by someone that is qualified with the Washington state Foreclosure Fairness act to make sure that the banks are doing what they should be doing in order to to help homeowners. This helps them modify their existing mortgage into a payment they can actually afford.
Homeowners need an attorney or housing counselor to actually ask for the meeting, which is something a lot of homeowners don’t realize. Many people feel that they can simply call up the lenders and ask for this meeting directly but that’s not the case. The meeting will happen in the county in which the homeowner resides. The housing counselor or your attorney will set up the meeting in a unbiased and neutral location. If you’re being called into the lender’s attorney’s office or the lender is setting up this meeting, this may not be the mediation meeting that you want.
Advantage Legal Group has completed many of these mediations by helping homeowners lower their monthly mortgage payment and keep them in their homes. Lenders such as Nationstar met with the attorneys at Advantage Legal Group and moved to their old payment of $3907 with interest of 2.75% to a new interest of 2% lowering their payment to $2564. This was a savings of over $1342 every month.
Advantage Legal Group states that one of the lenders that is difficult to deal with is Wells Fargo however, they were able to moderate and mediate a mortgage payment of $1609 down to $1411 with a reduction of nearly $200 and interest reduction from 3.5% to 2.75%. The couple in this scenario was actually 19 months behind in their mortgage payment so it really doesn’t matter how far behind you are, Advantage Legal Group can get the job done.
Another scenario showed an adjustable-rate mortgage of 9.1% and a payment of over $3100 down to a fixed interest rate of just 2% with a new payment of $1732. These are the type of stories that really makes sense to struggling homeowners that may risk foreclosure if they don’t do what they need to do in contact a lawyer or housing counselor immediately.
Jonathan Smith of Advantage does more people that you don’t want to wait too long. The longer you wait the higher the interest rate you might end up getting. Jonathan mentions that people can have a free consultation to figure out if this Washington State Foreclosure Fairness Act actually will work for their situation so don’t wait; give them a call today and find out if this mortgage modification can work for you.
Washington State Mortgage Modifications and Mortgage Mediations
The Washington State Department of Commerce that oversees the Washington Fairness Foreclosure Act estimates that 90% of the people who could have potentially availed themselves of this program failed to do so, mainly because they don’t know about it.
The Act allows homeowners to force banks to enter into negotiations to avoid a foreclosure, usually by a modification. The window of opportunity to request mediation opens once you get the notice of default and the window closes 20 days after the closing of recording of the notice of trustees sale in the county in which you live. You cannot request mediation yourself and the bank cannot request it for you. It has to be requested through a housing counselor or an attorney.
This is great news if you are one of the many individuals who feel like your bank is “blowing you off” so to speak. Why? Because this law REQUIRES that your bank’s lawyers come to the table to negotiate.
It used to be that Advantage Legal was able to get people modifications at 2% interest rates but rates are going up closer to 4%. Following are some recent examples of the kind of modifications Advantage Legal has helped people to obtain:
Servicer: Nation Star
- Old Payment: $3294.00
- Old Interest Rate: 6.625%
- New Payment: $1243.83
- New Interest Rate: 3.25%
- Payment Reduced: $674.72
Servicer: Green Tree
- Old Payment: $2506.90
- Old Interest Rate: 7.87%
- New Payment: $1118.38
- New Interest Rate: 3.25%
- Payment Reduced: $1388.52
In the case of the second example, they were 75 months behind in their mortgage payments! Imagine the relief they have now AND they can rebuild their credit score by showing that they’re able to pay their mortgage and recover from such a delinquency! Phenomenal!
Call Advantage Legal to help you today!
Will a Mortgage Modification Work for Me?
To hear the term, “mortgage modification” incites both hope and fear. Why because it is a way to save your home, but very few achieve it. Even housing counselors admit that there’s seemingly something mysterious that dictates who actually qualifies for a mortgage modification but there ARE ways homeowners can better their chances.
1) First, homeowners need to gather together and submit paycheck stubs, a hardship letter, a budget and any other documents that the loan servicer is going to want. You don’t want to miss ANYTHING because if you do, your loan file gets tossed aside to deal with a package that IS complete.
2) Next, you want to ask questions. Be certain you know exactly what to provide to servicers. Servicers often ask for two paycheck stubs assuming that two paychecks represent one month’s income. But a homeowner who is paid weekly, bimonthly or monthly may have to submit more or fewer paycheck documents. See the misunderstanding here? Similar misunderstandings on other documents can cause big problems.
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3) Additionally, you should keep contact/communication current. Homeowners should call the servicer at least weekly to check on their request. Ask if your package is complete and review the documents. Explain any and all special or changed circumstances. Counselors do help but lenders also want to hear from the homeowner often.
4) Lastly, be persistent. Of course, you’ll feel frustrated and annoyed when asked to resubmit documents. However, if you simply realize you’re at their beck and call and hang in there, you just may be rewarded in the end!
Some more tips:
Through all the above tips, remember to be FLEXIBLE…loan modifications come in many varieties. Consider taking what you can get.
Also, release your tax return. Homeowners are required to not only submit income documents, but also sign IRS Form 4506-T, which allows the servicer to access the homeowner’s federal tax returns. People often don’t succeed because their unable to provide good proof of income.
Contact Advantage Legal Group to get started on mortgage modification in Seattle.