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Chicago Loan Modification Attorney

What is a Loan Modification?

A Loan Modification is a restructuring of your current mortgage loan with your current bank. This is not a Refinance. It is a negotiation with your current mortgage lender to argue that you cannot afford the current payment. If we are successful in getting a Loan Modification approved, the loan will be brought current and the monthly payment will be lowered.

Who Qualifies for a Loan Modification?

The qualifications are vague, however, in order to submit a Loan Modification you must be employed, and you must be at least 30 days late on your mortgage loan.

The Loan Modification Process

The process involved in getting a Loan Modification approved takes between 5 and 8 months. However, it may take longer depending on the bank you received your mortgage through. During this time, however, you are not making a mortgage payment to the bank. Borrowers often try to make a payment during the Loan Modification process, but the bank does not accept payments from borrowers during the Loan Modification process due to the delinquency.

Documents Needed to Submit a Loan Modification

In order to submit a Loan Modification, you must submit the following to your attorney: 1.) Recent year tax return; 2.) Pay stubs for the past 30 days or a profit and loss statement if you’re self-employed; 3.) Recent mortgage statement; 4.) Past two months of bank statements; and 5.) Utility bill to prove that you still live in the property.

Your attorney will prepare an application for you to sign that will submitted to the bank. The type of application varies by each bank, so be sure to explain to your attorney who you current bank is and whether or not your loan has been transferred to another bank at any time.

Loan Modification Trial Period

Once the Loan Modification is approved, the bank gives you three trial payments to make. Most borrowers that are going through the Loan Modification process have not made a payment in a while, therefore, the bank requests for borrowers to make three payments on time consecutively in order to show Good Faith. If the three trial payments are made on time, the bank will grant a permanent Loan Modification and any Foreclosure Action brought against you will be dismissed.

Defaulting on a Loan Modification

If a borrower defaults (doesn’t make the payment on time), the bank will reinstate the Foreclosure Action against the borrower, and we will be forced to Defend against the Foreclosure Action in order to prevent the Foreclosure Sale of the home. A borrower can apply for a loan modification if 12 months have passed since the approval, or if the borrower’s circumstances have changed since the Loan Modification approval. Change in circumstances usually comes in the form of increase or decrease in income.

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