Loan Modification and Foreclosure Mediation
If you have found yourself with a mortgage that you cannot afford, you are not alone. Due to changes in the economy, changes in your circumstances, non-traditional lending practices, or fluctuations in the market in your area, you may find yourself with mortgage payments that are beyond your means.
This doesn’t necessarily mean that you have to foreclose on your home and absorb the negative credit implications that come from a foreclosure, however. At Wittner and Kent, P.S., we can help you modify your loan so that you can stay in your home or surrender your home with as few credit implications as possible.
In the event that a foreclosure is inevitable, we can guide you through the process and help you have all the information so you can make the best choice for your financial future.
What Is Loan Modification?
Many lenders are willing to work with homeowners on certain aspects of their loan details in order to prevent foreclosure. Modifying your loan can benefit both you and your lender since they often experience a financial loss during the foreclosure or short sale process.
If you have a non-traditional mortgage loan, you may have options to reduce your interest rate or payments. This negotiation can allow you to still satisfy the financial terms of your loan and keep your home, all while reducing your monthly or overall payments.
What Is a Short Sale?
In some cases, with the approval of your lender, you may be able to sell your home for less than it is worth in order to avoid foreclosure. While short sales still affect your overall credit rating, it may not be as drastic as a foreclosure and you can often recover your credit rating more quickly. Your lender may be willing to take a small loss in order to avoid the costly and lengthy foreclosure process.
What Is a Deed in Lieu of Foreclosure?
In some cases, your lender may allow you to completely surrender your home rather than foreclosing. This allows you to protect your credit, though you may experience income tax consequences, depending on your individual case, the value of your home, and the amount owed to your lender or lenders.
In the early 2000s, non-traditional loans and sub-standard loan options made it possible for buyers to purchase homes well beyond their means. With certain loan types, the payments that were once affordable have terms that increase the payments over time, making it impossible for some people to afford their mortgage payments.
Because of this common practice by lenders and banks, in 2011 a law was made to allow homeowners to meet with their lender and a neutral third-party mediator to discuss financial obligations, options, and modifications to your existing loan. By making changes to your loan agreement, you may still be able to keep your home under new terms.
Contact Us Today for a Consultation
Navigating the process of home ownership obligations can be a confusing and frustrating experience. Having an attorney on your side who knows the laws, your rights, and the options available to you can help!
Contact our Seattle or Tacoma law offices today and speak with one of our experienced attorneys. We are waiting to help!