Consumer Debt Advocate is a Law Firm where our experienced Case Managers, Paralegals, Analysts, former Underwriters, and in-house Attorneys gather your information to do a complete financial analysis to determine if you qualify for a loan modification. Additionally, we review your documents for mortgage fraud and predatory lending violations in most cases. If we think we can successfully win your case with the lender, we’ll fight on your behalf to get you the legal protection and immediate foreclosure relief you need, at a fraction of what a refinance loan would cost you.
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Notify lender you are represented by CounselComplete a financial analysis of your situationPrepare a case to present to your lenderHelp you create an effective hardship letterPrepare a property value reportPresent your package to your lenderNegotiate a new lower paymentProvide a modification agreementMany Consider Foreclosure as Home Values Drop
You bought what you thought would be a great long term investment, and maybe you put very little money down hoping values would continue to climb. Then the housing bubble popped and your home value took a huge downturn, especially in California housing markets, Florida Housing markets, and Nevada Housing markets. If this is your situation, you are like many Americans making mortgage payments on a house that is worth less than you owe. The temptation to walk away from your mortgage and have the bank foreclose on the property may be strong. You may not have considered however the long term implications of a foreclosure.
The housing market downturn is similar to cycles in any other investment vehicle in which there are both up and down cycles. Although the values may be declining now, once the credit market shake-up has run its course, values will likely start climbing once again. This will happen once there is more liquidity in the financial marketplace and banks are focused on loaning money for mortgages once again. You must ask yourself if you are walking away from your mortgage because you cannot afford it, or because you just don’t like the fact you are upside down in terms of valuation.
Defaulting on your mortgage and allowing the bank to foreclose on the property has many short and long term ramifications you may not have considered. The first of which is you will unlikely be able to get a new home mortgage, refinance, or any other type of home mortgage for a minimum of five years. A foreclosure on your record is an automatic disqualification to any potential lender in giving you a new mortgage loan, and is actually federally mandated under recent laws passed by the senate in an effort to get home owners to work with their lenders. Next, consider what missing 6-8 mortgage payments and the subsequent foreclosure will do to your credit score. If for example you have perfect 700+ FICO scores now, you will come out the other end with high 400’s to low 500’s FICO scores and the foreclosure could impact your credit for as much as 10 years. Additionally, Landlords may be unlikely to rent to you as you will now have a proven history of not paying for your housing costs. You will likely need to come up with $4000 - $8000 dollars to move into a new rental unit, calculating first and last month’s rent plus security deposits.
There are also moving costs to consider, the increased amount you will pay in taxes by not having the mortgage deduction, and the fact you will receive a 1099 and may have to pay taxes on the amount of money your lender needs to write down on the property. There are no free rides here and the average first year cost to a consumer who gets foreclosed on is over $26,000.
One option you may consider is using an Attorney to negotiate with your lender to acquire a Loan Modification or Principal Write-down to get some mortgage payment relief. Attorneys can negotiate with your lender on your behalf to lower your interest rate or even reduce principal balance in some cases if your are experiencing financial hardship. In speaking with California Real Estate Attorney Marc Bonanni of Consumer Debt Advocate ( http://www.consumerdebtadvocate.net ), a law firm specializing in just such Home Loan Modifications and Loss Mitigation in all 50 states, Marc told me that “ We have been very successful in working with lenders to get them to modify the term of existing loans, lowering interest rate and monthly payments to one the borrower can afford, and even getting lenders to forgive past due balances or principal balance with forbearance agreements to avoid the foreclosure process. It all is predicated on the true financial hardship we can prove to the lender and if there were any Truth in Lending violations or Predatory Lending violations on the original loan. Mortgage fraud has been rampant, specially with sub-prime borrowers and our success rate has been excellent in the loan modification process”.
Before you decide to walk away from your property and allow it to be foreclosed on, we feel it is important to consider all of the short and long term credit and financial implications of doing so. It is also important to act quickly before saving your home is too late, as once the lender sends you a Notice of Default, you may have incurred thousands of dollars in legal fees that will make the negotiation process that much more difficult to achieve.
Foreclosure and Loan Modification Predators
Consumers who are facing foreclosure have become prime targets for former or current mortgage brokers, and other “loss mitigation” or “loan Modification” companies. You should think twice before sending your money and signing a contract with any company that does not allow you to actually retain an attorney to negotiate on your behalf. Many of these predatory companies state they are “Attorney based”, Attorney backed”, “Stop foreclosure companies”, “Foreclosure consultants” or a myriad of other new terms that keep popping up. In most cases these companies offer money back guarantees, but actually keep their “hard costs” leaving you with a paltry refund when they are unsuccessful in modifying the terms of your original loan. Many of these companies do nothing for you an may just run with your money. In most cases the best they can get for you is a Forbearance agreement from your lender allowing you to repay past due monies, which you may be able to easily do yourself. Be sure to ask if the Attorney is onsite and available for a consultation, and ask for their Bar number as part of your diligence.
Unless you retain an Attorney or a Federally licensed HUD counselor, beware you may be getting scammed out of the last of your hard earned dollars. An attorney can leverage many issues and deal with the actual legal department of your lender who likely wants to avoid going to court on your case and would rather modify your interest rate to get you a new payment you can afford. In speaking with California Real Estate Attorney Marc Bonanni of Consumer Debt Advocate ( http://www.consumerdebtadvocate.net ), a law firm specializing in just such Home Loan Modifications and Loss Mitigation in all 50 states, Marc told me that “ We’ve had tremendous success working with lenders to get them to modify the existing terms of the loan, lowering interest rates and monthly payments to one the borrower can afford, and also getting them to forgive past due balances or principal balance with forbearance agreements to avoid a foreclosure. It all is predicated on the true financial hardship we can prove to the lender and if there were any Truth in Lending violations or Predatory Lending violations on the original loan. Mortgage fraud has been rampant, specially with sub-prime borrowers and our success rate has been excellent in the loan modification process”. Marc also states that “Unfortunately, many of our clients have been through the ringer with these non attorney loan modification companies who wind up doing nothing for them and who make matters worse as they cannot afford the client any legal protection. By the time they get to us, it may be too late to save their home and they are out thousands of dollars and critical time that were wasted in a poorly handled attempt to modify their loan by non-attorneys who are dispensing legal advice. It’s really sad when I have to tell a potential client who I knew we could have helped save their home and modify their loan that they are too far down the path with their lender to stop the pending auction of their home.”
Also beware of companies who offer to save your home and who offer you a new loan, but require you to deed title to them for doing so. Most of these scams are stealing all of your equity by paying the amount you are in default to the bank. If you have $60,000 in equity, and are $11,000 in the arrears with your lender, that company just made a 6x return off their investment and left you with a mortgage payment and no equity in your home. They will then be waiting for you to default or will force you out of your home to realize their profit. By hiring an Attorney, you could likely get your lender to take that arrearage you owe and make a repayment plan you can afford, or even get them to put that money on the back of your loan so you can start meeting your new lower monthly obligation.
Regardless of your situation, it is important to make sure you due diligence on any company you engage to help you avoid foreclosure. Beware of the scams that are out there and make sure an attorney is actually retained by you as part of the process to protect your legal rights and ensure both compliance and success in the loan modification process. Licensed Attorneys are held to a strict code of conduct and higher ethical standards, and although they cannot guarantee a successful outcome of your case, they are much more likely to take it only if they feel they have a strong chance of success.
Can't Qualify For A New Mortgage
2 years ago, I decided to take out an adjustable rate mortgage on my Florida home as the Mortgage Broker convinced me this was the best financial instrument given my goals and cash flow position. I had only planned to be in the home for a short 3-4 year period, so the lower payment made sense at the time. I was assured I could refinance beforethe rate adjusted upwards if I decided not to sell my house. As time passed and my house did not sell due to slowing market conditions and declining values, my adjustable rate mortgage got closer to resetting to a new higher rate, I went out and started searching for the new perfect loan. Instead of a new loan, all I received was a shock. I could not qualify for a new loan!
Despite having perfect credit with an 800+ FICO score and even 30% equity in my home, as a self employed businessman I am unable to fully document my income to meet the new home loan underwriting guidelines so i was told. I have come to learn that even an ideal borrower like myself who has never missed paying a bill, has perfect credit, can’t qualify for a new mortgage in the current credit environment. As such, I’m now stuck in my adjustable rate mortgage that has now reset twice and my back is against the wall. I approached my lender hoping they would understand my situation and be sensitive to the fact my mortgage rate has gone up while my income has going down and leverage my good payment history with them. I made what I felt was a very strong appeal to the loss mitigation department of my lender, but after several months of negotiations with them I got nowhere. It was then that I stumbled upon www.consumerdebtadvoacate.net, a loan modification law firm.
After speaking with Greg one of the Case Managers at Consumer Debt Advocate, they were able to complete a financial analysis of my situation and determine that my loss of income due to economic conditions that have impacted my take home pay was indeed a true hardship that qualified me for loan modification help. I was also told that although my debt to income currently was not enough to qualify me for my current mortgage payment under my lenders own underwriting guidelines, I was still given this loan by the lender. After the CDA attorneys put my lender on notice that I was represented by Counsel, my lender became much more willing to address my case. We even came to find out by requesting my original loan documents that the mortgage broker I got my loan through inflated my income level without my knowledge, to get me to meet the qualifications in the stated income loan I acquired.
After speaking with my new CDA Attorney Marc Bonanni, he completed a financial analysis and predatory lending review of my situtation over the next week, and reviewed my case with me prior to submitting it to my lender. In some ways, the process was very much like applying for a new mortgage but without the gamesmanship. Everything was handled very professionally and I came away with a lot of knowledge about how things really work on the lending side. After 45 days of haggling with my lender, Attorney Bonanni was able to get my rate lowered by 2.5% to a new 6% 30 year fixed rate loan and I can now afford to make my payments and not go late on my mortgage.
I would imagine many people out there are in the same boat I was in or worse in regards to their adjusting mortgage rate and who need help avoiding foreclosure by modifying their loan. Go out and do your research and make sure you are hiring an attorney, not the same mortgage broker who put you into that bad loan as there are many non attorney companies calling themselves “Attorney based” or "Attorney Backed” that are fronts for unscrupulous mortgage brokers looking to make a quick buck I found out. After shuffling through the websites of several companies I retained a legitimate loan modification attorney and had tremendous success with him negotiating my mortgage to a new payment I could afford.
What you need to know about the Loan modifcation Process
Recent legislation at the state and federal level as well as some recent bank takeovers by the FDIC have made loan modification application rates soar. Unfortunately, most consumers on their own are having little to no success modifying their loan, unless it is just a forbearance agreement in which the lender allows the borrower to pay back any monies that are in arrears over time. This is hardly a loan modification and the late payments a have already adversely affected your credit and make it impossible for you to refinance.
Unfortunately, most companies that are not law firms can only get you a forbearance agreement, and they do nothing to protect your rights, so make sure you have loan modification attorney represent you with your lender to protect your legal rights. In fact recent legislation enacted in California Loan Modifications requires that a lender must give you a modification review prior to foreclosing on your property, and the consumer may only be represented by an Attorney for HUD approved Counselor, or they give up many of their rights in a foreclosure. Many of the “Attorney Based” or “Attorney Backed” companies actually are not law firms nor will you be represented by legal counsel and could give up many of your legal rights by using such a company. The banks will not modify willingly and only an attorney can protect your rights and apply the right kinds of pressure to a Lender’s legal department to get you the result you are looking for. Even HopeNow, a free service that offers counseling to consumers is so mired in backlog, most consumers homes will be foreclosed on long before they get help.
“If you are looking to modify your loan, be prepared to have a truthful and honest about both the reasons for your financial hardship as well as your true financial picture” says Marc Bonanni, Attorney for http://www.consumerdebtadvocate.net. . “Be prepared to provide documentation as back-up. Properly preparing a case to take to your lender in the loan mitigation process is critical, and properly structuring the mitigation proposal off the information you provide is a key aspect of preventing foreclosure” says Marc.
It is also important to understand that you must meet strict financial guidelines to even be considered for mortgage mitigation. If your financial picture is so dire that you are still financially encumbered even with a 1% interest rate, it is unlikely that you will be able to save your home from foreclosure. If your lender feels they will take less of a loss if they foreclose now because there is uncertainty that you can meet your new modified loans structured payments, they would rather foreclose now to lessen their loss.
There are three key elements in any loan modification or loss mitigation process. Each is an area to negotiate depending on the borrower’s unique circumstances. The first would be adjusting the interest rate of the first or second mortgage to a lower one that would be manageable by the consumer. The second would take into consideration any missed payments and penalties that are in the arrears, and structuring a repayment plan or putting those monies on the back of your loan. The third and most difficult is if your loan is now worth more than your property. Getting the lender to write down principal balance can happen in the right circumstances, especially if there are predatory lending issues involved in your case, but don’t expect your lender to make you whole on your bad investment decision. Again, preparing the right argument is key and expect the negotiations to take 45-60 days at a minimum. It is an intense process and the Loss Mitigation departments at most lenders are understaffed to meet the monstrous demand of consumers who are vying for their attention from everything from late payments to foreclosures. Again, most attorneys can bypass the loss mitigation department and work directly with your lender’s attorneys, so this is still your best bet for success in the loan modification process.
