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10% of All US Homes Are in Pre-Foreclosure or Foreclosure According to Associated Press. Time for Mortgage Modification.

^{Published on 2008-12-15 17:07:40, Last Modified on 2009-11-02 11:25:05 - Alex Tokarev}
 

According to Associated Press, a record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted from risky loans to the crumbling U.S. economy.

The percentage of loans at least a month overdue or in foreclosure was up from 9.2 percent in the April-June quarter, and up from 7.3 percent a year earlier, the Mortgage Bankers Association said Friday.

Distress in the home loan and real estate market started about two years ago as increasing numbers of adjustable-rate loans reset to higher interest rates. The latest wave of delinquencies is coming from the surge in unemployment.

First Liberty Law, www.firstlibertylaw.net specializes in loan modification. A loan modification is a change in the loan contract agreed to by the lender and the borrower. The modifications getting attention now are those designed to reduce the payment burden on borrowers faced with impending interest rate increases that will make monthly payments unaffordable to them.

Homeowners faced with this prospect, whether they are delinquent or not, should request a modification through our law firm. You are unlikely to get such a change if you don't have legal and or financial representation, and you should make the investment required to make the case. The stakes are very high: your house and your credit.

Mortgage Modifications range from deferral of payments, extending loan maturities, converting adjustable rate mortgages into fixed rate mortgages or full indexed rates, fully amortizing adjustable rate mortgages, capitalizing delinquent amounts. The best scenario for the lender and yourself is a solution that will provide a long term resolution to the problem. Other strategies include reducing or forgiving your principal. In the past, this resulted in the homeowner paying taxes on the reduced amount. However, recent legislation has temporarily suspended this tax burden.

First Liberty Law Group, PLLC, www.firstlibertylaw.net , provides lenders with the best information possible to represent their case properly. In most cases, the decision on a modification is not made by the firm that owns the loan. It is made by a firm servicing the loan under contract to the owner. The owner could be a single lender, or it could be a group of investors who own pieces of a mortgage-backed security collateralized by a pool of loans.

Whoever owns the loan, the servicing firm is contractually obligated to find the solution to payment problems that will minimize loss to the owner. If the lowest-cost solution is a contract modification, that's great -- everyone involved prefers a modification instead of a foreclosure. But if a foreclosure would generate lower costs for the owner, the decision will be to foreclose. The cost of foreclosure to the borrower does not enter the decision. Yet the decision is far from cut and dried, and it can be materially affected by whether and how the borrower s case is presented.

Perhaps the most important factor affecting the modification decision is the amount of equity the borrower has in the property. If the borrower has enough equity in the property to pay any deferred interest plus foreclosure expenses, foreclosure is almost bound to be the lower-cost solution.

Equity depends on property value, which the borrower is much better positioned to know than the servicer. The borrower knows or can easily find out how many houses in the neighborhood are for sale and what the trend has been in recent sale prices. In a weakening market, it is easy for the lender to overestimate value, and the borrower must prevent that.

Servicers fear that if they are liberal in granting modifications, borrowers who don't need a modification will seek one anyway. They protect themselves against this by entertaining modification proposals on a case-by-case basis, while placing the burden of proof on the borrower.

Borrowers must accept the burden of proof. In addition to the data on property value, they need to document that they cannot afford the payment increase that is pending, and they must document what they can afford.

To do so, we calculate their total debt ratio: the sum of mortgage payment, other debt payments, property taxes and homeowner's insurance as a percent of their gross (before tax) income.

This number should be calculated as it stands now and as it would be after the modification.

First Liberty Law specializes in Mortgage Modifications, Short Refinance, Short Sales, Real Estate Law, Banking, Dispute Resolution, Immigration Law, Criminal Law, Licensing, Litigations and Landlord/Tenant Law. Talented Attorneys have years of experience so that they can specialize in many other practices.

Homeowners across the U.S. are still feeling the crunch from the housing bubble that hit the country earlier this year. As sub-prime mortgages reverted to regular interest rates, a large number of homeowners have found themselves unable to make ends meet, and many have lost their homes to foreclosure. The number of foreclosures peaked in 2007, and according to experts, the situation is yet to stabilize.

Today s borrowers need a law firm where an attorney or an employee of the firm will work with the Mortgage Modification under the attorneys supervision. This offers promising solutions to homeowners at risk of losing their homes. Loan modification is a contract between a lender and borrower to restructure a mortgage, designed to help struggling borrowers meet their financial obligations. Mortgage Modification helps homeowners negotiate better rates with their lenders and avoid drastic measures such as foreclosure.

Borrowers need attorneys and staff that are experienced debt negotiators with years of related real estate industry experience. The firm should have the contacts and systems in place in order to get in immediate contact with your lender and begin the negotiation process. Having an attorney on your side helps tremendously when negotiating a loan modification.

An attorney based modification tells your lender that you're serious about finding a solution to your problem. They will negotiate the best possible solution, one that will make sense for both you and your bank.

First Liberty Law Group, PLLC is an established law firm who has handled over 4,000 successful loan modifications, short refinances and short sales. First Liberty Law Group, PLLC has established contacts with all major American lenders.

The loan modification process starts with a legal consultation. The Loan Modification team will review the borrower's financial situation and history, ask for supporting documents, and then will work out a customized negotiation plan. Also part of the plan is to review the original loan documents for violations of the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), which can be used as leverage during the appeal. The team then sends the application to the lender and begins negotiations.

An aggressive yet measured approach to the loan modification process is what is necessary in this troubled loan environment. All clients are fully informed of their options, and are guided through the application from start to finish. Firms like First Liberty Law Group, PLLC keep negotiating until lenders make a reasonable offer. Loans have successfully been negotiated with interest rates to as low as 2.50% fixed, and can stop foreclosures even after the homeowner has received their notice of sale.

The real estate crisis has caused a significant rise in loan modifications, and subsequently in loan modification firms. But the offices of First Liberty Law Group, PLLC has a clear head start and remains one of the most ethical and reliable firms in the Country. Interested homeowners can reach them at 800.935.3593

CONTACT: www.FirstLibertyLaw.net Alex Tokarev alex.t@firstlibertylaw.com 800-935-3593