Life can throw curve balls and that also goes for finances. When things get pretty financially tough for a New Jersey homeowner, he or she may consider a loan modification as a way of easing the financial stress. Essentially, loan modifications restructure a mortgage by altering one or several terms in the hopes of lowering monthly mortgage payments.
Lenders are often usually open to discussing a loan modification since it is a more palatable alternative to foreclosure. Banks do not want to own houses. In addition to lowering monthly payments and the interest rate, a loan modification could also extend the term of the mortgage, giving a homeowner more time to pay down the debt.
There are several modifications programs available through the federal government as well if a homeowner qualifies. The first step to starting the process is to call the mortgage lender to see what can be done in the case of financial hardship. The lender will likely ask for documents such as an income statement, monthly expenses, bank statements, pay stubs, a hardship letter and an IRS Form 4506-T.
A New Jersey attorney may be able to assist a client who is looking for a loan modification. In some cases, a lawyer may even be able to halt a foreclosure, negotiate with lenders on a client’s behalf and complete necessary paperwork. A lawyer may also be able to help by explaining the various legal options available to a client who is in a dire straits financial situation.