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Real Estate Q&A: Bank Might Offer 2nd Loan Modification

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By Gary M. Singer

loan modification(MCT)—Question: A few years ago, our mortgage lender approved a loan modification after we had fallen behind due to a job loss. Recently, we had another issue and had to stop payments again. Now we are in foreclosure. Is there any hope to save our home?

Answer: Yes. Statistically, around a half of the people who have received a loan modification will fall behind again. But the banks are still willing to work with owners and give them a second or third shot at saving the family home. As with any loan modification, the deal must make sense for both sides. The modified payments should be no more than 31 percent of your gross income, property taxes and insurance. And you will need a good explanation for why you defaulted on the original modification and why your situation is better now. You’ll want to approach the bank with all of your financial information in hand and immediately respond to its requests, even if it means faxing the same document multiple times.

Don’t get frustrated or emotional about the delays and hoops you need to jump through and continue to push for the modification, even after repeated denials. Also, because you were served with a foreclosure lawsuit, you’ll need to properly respond to that, so contact a lawyer about your legal rights. Defending the foreclosure while pursuing a loan modification will give you the best chance to keep your home.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.

©2013 Sun Sentinel (Fort Lauderdale, Fla.)

Distributed by MCT Information Services

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