Two approaches for a borrower or lender in this situation is to hire either a loan modification attorney or a loan modification company. Though they both work toward the same goals these are different sorts of parties both legally and practically speaking. Let us compare and contrast them for better understanding.

Loan Modification Attorney

A loan modification attorney is a lawyer that works one on one with clients to alter the terms of loans. They are often paid a retainer fee just as in any other legal representation situation. These attorneys are licensed in their states to practice law and are knowledgeable about the issues that go into having the terms of a loan modified in court. The following are some activities such an attorney engages in:

Negotiates with Lender for Better Loan Terms

Essentially, as noted above, loan modification attorneys negotiate with a lender – for instance a bank that has issued a mortgage – for better repayment terms on a loan. This is the case regardless of whether or not the issue goes through some kind of court proceeding. The loan modification lawyer argues on the client’s behalf for loan terms that the borrower is more likely to be able to handle and often uses an extensive knowledge of financial law to make their case.

Gives Legal Advice

This type of attorney also gives legal advice to borrowers, advising them of which actions to take. Again, the fact that they are licensed lawyers gives them the legal authority to do this. They try to set up reasonable repayment terms for the borrower not only by representing them but by advising them as to what their legal rights are.

Offers Full Legal Representation

Should the case go to court, this kind of lawyer will represent a borrower in court. They will argue the client’s case and show how more favorable terms are both legally allowable and helpful to a client.

Loan Modification Company

A loan modification company, on the other hand, consists of a team of individuals who are generally not attorneys but rather have similar skill sets to loan officers, lenders, and processors at banks. These companies may also be known as debt consolidation or debt settlement companies. For a fee they perform service related to loan modification for both borrowers and lenders. The following are some activities these types of companies engage in:

Negotiate with Lender for Better Loan Terms

The company negotiates with a lender without there being any formal legal process or representation involved. They may simply try to reach an agreement with a lender, showing the latter how a modification is to their advantage and offering to handle a large part of the administrative work of collecting the actual payments.

Assess Borrower’s Ability to Repay

Through a review of a client’s wage statements, tax returns, bank accounts, investment accounts, and so on, the debt consolidation firm attempts to assess a borrower’s ability to repay a loan. They then use this information to help set up new payment terms with a lender.

Help Lenders Recoup Loans

Loan modification companies work on behalf of lenders as well as borrowers to reach new loan repayment terms or simply to collect a debt. They may contact borrowers in an attempt to set up new payment terms and thus get the ball rolling on repayment of an overdue debt.

When the market was booming, it was easy to get a home loan; some people might even say that it was too easy, and many families ended up with mortgage notes that were above their means. As a result, mortgage defaults are increasing, with thousands of families looking for debt relief options. While the loan modification is one solution, some people do not qualify for this service or find that it is not the best fit for their needs. There are, however, debt relief alternatives to the loan modification.

Short Sales

If you have already consulted with a loan modification attorney and found that adjusting your current note is inadvisable, it might be time to talk directly to your lender. Many lenders are willing to help you sell your home with a short sale. A short sale will not allow you to keep your home, but it will eliminate the debt associated with it. By definition, a short sale means that your home will likely sell below its market value. Depending on the bank, your lender could forgive the remaining balance or require you to pony up the difference. Be aware that, if you do end up with a forgiven balance, there are government programs in place to reduce or eliminate taxes on what would otherwise be considered income.

Refinancing

Even if you decide against a loan modification, it might still be possible to refinance an existing loan. In fact, a loan modification attorney is probably also qualified to consolidate or refinance loans in a more standard format. Refinancing is especially useful for people who ended up with an adjustable rate mortgage. These were freely given when the market was good, but have devastating financial consequences to many homeowners in a falling housing market. While refinancing can certainly move a homeowner in the right direction, it’s important to realize that you will be responsible for a new set of closing costs and loan fees. Do the math to determine what your bottom line will be when using this mortgage debt relief alternative.

About Reverse Mortgages

Although a reverse mortgage is not really a direct alternative to modification, it is getting a lot of press. While a loan modification attorney mainly works with people who are carrying mortgage debt, they can also help with general debt management, making this a reasonable solution for older homeowners. A reverse mortgage can be used by seniors to free up the equity in their home and apply it to other debts. In order to qualify for this program, you must be over 62 years of age.

A short sale would mean that the house is sold for an amount less than the former homeowner owes the bank, but the bank may agree to write off the amount that is left on the loan. They can also require the former homeowner to pay the difference, but these payments will not be in the form of monthly payments like their mortgages.

There may be benefits to a short sale, but there are also some consequences of avoiding foreclosure in short sale. The fact that a short sale is a negative blot on the credit report if the bank chooses to report it is one major outcome of this type of deal. A mortgage modification attorney will be able to explain more about this aftereffect.

The deficiency judgment, the amount the homeowner continues to owe the bank on the property after short sale, may be too much for the homeowner to handle. It could be a large amount of money that the homeowner does not have in full. Serious consideration must be given before making this sort of deal and a mortgage modification attorney can help people see what may be waiting for them in the future.

Homeowners have to pay property taxes. They will still owe these taxes if they have been unable to pay them in the past, even if they agree to a short sale of the property. One way to ease the pain of paying these property taxes is to find out if they qualify for tax relief under the Mortgage Forgiveness Tax Relief Act. Homeowners can inquire about this possibility by contacting a mortgage modification attorney.

If a short sale is not possible, homeowners have the option of seeking a loan modification. A loan modification is a renegotiation of the contract, which results in new terms that are, hopefully, more favorable to the homeowner. A loan modification also requires the services of a mortgage modification attorney who has years of experience in the practice.

A loan modification can mean many different things. One way that homeowners are modifying their home mortgages is by changing the terms of the loan. By refinancing an existing mortgage in to a thirty year plan it is possible to make your monthly payments lower, which will help many homeowners in a time of desperation. This method will help homeowners who may owe, for example, $200,000 over twenty more years, pay that off over 30 years. These extra ten years will lower the payments significantly.

Another method of loan modification is to refinance for a lower interest rate. The government has lowered the prime rate to all time lows in an attempt to stimulate home purchases and to help bail out struggling home owners. By changing your interest rate to a lower rate you can save hundreds of dollars a month! Unfortunately, strict lending policies by banks and mortgage companies make this difficult for some homeowners, but it is definitely worth looking in to.

By changing the term or the rate of a mortgage many homeowners have found themselves in much more comfortable financial situations. In a rough economy when the unemployment rate is very high there are many people struggling. It is often a smart move to extend the term of your mortgage to make your monthly payments more affordable. It is worth paying a loan for an additional ten or twenty years if the alternative is to lose your home to the bank.

Best of luck with you home loan modification! These are just a few ways that you can save money every month on your mortgage payments!

Many people do not feel comfortable dealing with paperwork or corporate personnel. Others just feel that they may not qualify for the program or do not know how to find out if they do. This is where a loan modification specialist comes into the picture.

A mortgage modification specialist can help you save your home by preparing and filing all the necessary documentation needed for a loan modification. They can, right from the beginning, show you how everyone that has had a change in their income qualifies for help. They can also show you how simple the process to save your home and gain control of your finances can be.

A loan modification specialist is knowledgeable in all the new regulations that went into effect this year surrounding the program. They can ensure that your paperwork will be filed on time and with the correct attachments. They can also make sure that the lender complies with all the deadlines set in these new laws. Many loan modifications have been denied simply because filing times were not met.

A mortgage modification program can also help you receive the best modification available. Some lenders will only slightly modify the loan, basically bringing it current with no other help. Using a loan modification specialist you will be able to utilize the new Home Affordable program that prohibits the mortgage payment from exceeding 31% of gross income and encourages forgiveness of part of the mortgage balance itself. This program can only be utilized through an loan modification service.

There are many reasons to use the services of a mortgage modification specialist. However, the best reason to use one is to save your home. Once the modification ahs been granted your loan will be current again. This is a great way to keep you home, keep your credit rating and move on to a better tomorrow. Times have been tough on many, take advantage of this program so that threes tough times do not have to remain.

There is hope to save your home, regardless of your situation or credit history.

A home loan modification can help ease your financial burdens during this rough time and ensure that you can afford to stay in your home. New legislation enacted earlier this year has given the home owners of this country a way to defeat all this bad news about the housing market.

When you receive a home loan modification the loan payment can be adjusted to no more than 31% of your net income. This adjustment alone will save you money each month, allowing you to apply the extra cash to other necessities. Your interest rate will be dropped, reducing your debt and, in many cases, a portion of your mortgage balance will be forgiven. Each one of these actions can save your home.

There are also new regulations concerning the time frame for processing a home loan modification. Now there are specific guidelines for response times on both parties which ensure that the process is not extended beyond a point where the program will not help the home owner.

If you need a home modification you should seek the counsel of a loan modification attorney. The process while regulated is still complicated and the simplest oversight can cause you to be delayed or denied. By seeking professional help you will know that you are in compliance of the law and that your paperwork is being processed in a timely and correct manner.

You do not have to risk your home nor do you need to continue to suffer financially. The loan modification program can be the solution to your problem. It will help keep you out of foreclosure, reduce your debt and make your monthly obligations more affordable. It is a simple decision to make, all you need to do is make it.

In order to be considered for this program, borrowers will need to prove that they can meet the guidelines for this program and approval criteria.  The most important basics are:

1.    Borrower(s) must live in the subject property as your primary residence
2.    Borrower(s) monthly mortgage payment must be more than 31% of your gross monthly income
3.    The borrower(s) mortgage must have been originated prior to January 1, 2009 and be less than $729,750
4.    Borrower must be suffering a financial hardship and be able to prove it.

How do borrowers benefit from a countrywide loan modification and what would new loan terms could look like if approved?
Under the making home affordable program, your Countrywide loan modification mortgage terms could be:
1.    The Interest rate reduced to as low as 2%
2.    The Term of the loan extended to 40 years
3.    Some principal balance may be deferred or arrearages tacked to the back of the loan

If unfortunately you do not meet the making home affordable program guidelines, countrywide will keep on working with all borrowers with their in house countrywide loan modification. All successful candidates who meet these guidelines will be able to move past the pre-qualification phase and submit their paperwork. And must be able to prove that they in fact meet all the approval guidelines.  Pre-qualified homeowners must submit proof that they will be able to maintain and pay without defaulting again on the new modified payment in the future.

President Obama has encouraged homeowners to work with their bank to get a loan workout so that foreclosure can be avoided.  You can only apply for this program one time; therefore make sure that you understand these guidelines before applying for a countrywide loan modification.

A Countrywide loan modification might be the help you need to keep your home, seek professional help if you don’t understand this process.

What are your methods?
Just as each homeowner’s situation is different, each loan modification attorney California has his own way of solving the problem. At the very least, make sure he or she has a game plan in mind, and studies your case before doing so. Otherwise, there’s a lot of guesswork involved, and you don’t want to take that risk when your home is at stake.

How much do you charge?
Loan modification fees can vary from a few hundred to several thousand dollars. Ask your California loan modification attorney exactly how much the process will cost from start to finish, with no hidden fees. Don’t agree to pay anything up front; if they ask for part or all of the fee at the outset, it’s most likely a scam.

How much experience do you have?
Many loan modification firms sprung up barely two years ago, just as the foreclosure boom was starting. Most of them, unfortunately, are just taking advantage of the demand. Make sure your loan modification attorney California has been in the field long enough to know how it works. Ask for references and call up previous clients for firsthand feedback.

What’s your expertise?
While loan modification generally works the same way, each California loan modification attorney has his own strong points. Some may have more connections with the big banks, while others specialize in smaller sub-prime lenders. Choose a loan modification attorney California who has worked with people in similar situations as you.

Do you have a backup plan?
Sometimes, loan modification simply doesn’t work–some people don’t agree with the bank’s offer and some are just too deep in debt. Your California loan modification attorney should give you alternatives in case your request doesn’t get approved, or at least refer you to other parties who can help.

Read Full Blog Post Here: Getting a First Horizon Loan Modification

But as with any other tactic, a home loan modification program is only as good as you can make it. There are fraudulent companies and unethical lenders out there, and it’s easy to make costly mistakes. If you’re thinking of getting a home loan modification, here are some tips and strategies to help you get the best deal.

Start early.
In the past, only people who were seriously delinquent or already foreclosure could get home loan modifications. However, lenders have become more lenient as government support gave them more incentive to modify loans. Starting early shows the lender that you’re responsible and determined enough to keep your mortgage on track.

Get professional help.
You may be tempted to handle the loan modification on your own to save money, but getting help from the pros can give you a serious advantage. A loan modification attorney or representative can get you in touch with the right department, help you gather the right documents, and plan your application according to your lender’s policies.

Do your research.
Most loans today are either owned by one bank or shared by many as mortgage-backed securities. Generally, sliced-up loans are harder to modify because there’s more than one entity with an interest on the loan. Find out who owns your loan by calling your lender or checking government sites like Fannie Mae or Freddie Mac.

Provide accurate information.
One of the first requirements for a home loan modification program is a hardship letter. Here, you explain why you fell behind and how you plan to get back on your feet. Lenders will need to verify all your claims, so don’t try to embellish your story. As much as possible, back it up with documents such as pay stubs, tax forms, and bank statements.

Set realistic goals.
Many lenders will offer new terms that are only slightly better than your current one. Don’t settle for a less-than-ideal deal out of desperation. A good loan modification attorney can help you negotiate more effectively and get a home loan modification program that makes financial sense for both you and your bank