What If I’m a Year Behind in My Mortgage Payments?
You may be behind only two months in your mortgage payments or up to two years behind! Wherever you may find yourself on that scale, the question is, what do you do and what’s going to happen? First and foremost, let’s be clear that it is vitally important that you keep in good communication from the get-go or as soon as possible. The longer you avoid notices due to embarrassment or denial, the worse things can get.
Lenders are usually very willing to work with you UNTIL a Notice of Default is filed. Once one of these is filed, it is very hard to work with your lender as they are looking out to protect their interest. So, be sure to communicate early and often. Also, keep a clear record of every time you communicate with your lender: the day you called, the name of the person you talked to and what you talked about. This can only help you later down the road. Remember, lenders do not want to foreclose, so if you’re unable to fulfill your mortgage obligation, contact your lender immediately so they can give you options to help you.
Options may include:
–time to make up your payments. You may be granted something called forbearance, an agreement from the lenders to not take action against you while you work out a repayment plan that is affordable for you.
-forgiving a payment. The lender may grant you debt forgiveness, which means they may let you skip a payment or two if you can prove that you will be able to pay thereafter. However, this rarely happens.
–repayment plan. Sometimes you can spread the missed payments out over a longer-term. For example, if your mortgage is $900, you may pay $200 more a month until you’re caught up, temporarily making your payments $1100.
-change the terms of your loan. Maybe your interest rate can be adjusted or maybe your amortization period can be extended.
–refinance. You may be able to add the back payments to the balance of your loan if you have sufficient equity.
-partial claim. Some government loans have provisions that allow the borrower to apply for another loan to pay back the missed payments if they meet certain criteria.
The above are routes of action if a Notice of Default has not yet been filed. if one has been filed, your remaining options are to reinstate your loan, sell your home, consider a short sale or sign a deed in lieu of foreclosure.
Surprisingly most people in Washington state don’t even realize that they can qualify for a 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 oftentimes 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 events 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.
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If the homeowners do not want to enter into the mortgage ocean the bank will usually proceed to the second notice, “Notice of Default” 90 days after the issuance of the first notice. At this point that you can still request mortgage mediation but must be negotiated by the HUD counselor or an attorney. After notice of default is an issue they post the third notice, “Notice of Trustee Seller”. This is if the homeowner has not requested a modification. The bank will continue on the foreclosure without the homeowner does something to stop it.
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 residence, 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 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 payments 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 an interest of 2.75% to a new interest of 2% lowering their payment to $2564. This was a savings of over $1342 every month.
We Are Mortgage Modification Lawyer in Bellevue and Seattle
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.
Mortgage Modification Lawyer in Bellevue and Seattle
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. 425-452-9797
Hi, my name is Jonathan Smith and I am an attorney servicing Western Washington. My law firm does mortgage mediation, mortgage modifications, bankruptcies and short sales.
Right now with the current pandemic, homeowners may be fearful of losing their homes due to foreclosure. If you’ve been out of work and unable to either get employment or just not enough to make your mortgage payment, foreclosure may be on the horizon. It’s extremely important to act now and as quickly as possible to avoid foreclosure.
Foreclosure defense is the legal strategy initiated by a homeowner to avoid foreclosure. The simplest way is to simply modify the mortgage but the homeowner may not be able to do this alone with their lender. They may need a foreclosure defense attorney to renegotiate the terms of the mortgage in order to make the payments more affordable or put off the payments for a couple of months.
In several cases, homeowners can successfully contest foreclosure proceedings with the help of a foreclosure defense attorney. We help homeowners find legal grounds on which the proceedings can be challenged. In rare cases, mortgage companies have filed foreclosure proceedings illegally.
We are offering foreclosure defense services, which use all of the above to attempt to avoid foreclosure, if at all possible. The single worst impact on your credit is a foreclosure. It’s far better to have either a short sale or some other disposition of the property, or a mortgage modification or a mediation – than it is to have a foreclosure.
We are offering services to help you work out the best methodology for dealing with your current situation. If that’s something that interests you, check out my website at AdvantageLegalGroup.com Again, AdvantageLegalGroup.com. And I look forward to meeting you.