Loan Modifications in California
Chino Bankruptcy Lawyer
If your home is not worth what is owed against it, you have several options. One is to negotiate with your lender(s) to see if they will reduce the amount owed. This effort is known as a loan modification. At the Law Offices of David R. Gunnin, our legal team can explain what options you may have to help you avoid foreclosure. If your home is worth less than what you owe, you should seek legal representation immediately to discuss your available options and to begin pursuing the future that you need.
Lenders are not required to negotiate and, as you might expect, most often do not find it in their best interest to do what is most advantageous to you. For example, if your home is worth $300,000 and you have a first mortgage of $350,000 and a second mortgage of $100,000.00. In most instances, neither lender will want to reduce interest, payments or principal. Understandable, but this does not help you in your efforts to stay in your house.
Lien "stripping" is the legal process in a Chapter 13 bankruptcy whereby a judge grants a motion to avoid, or strip, the lien interest of a second or third mortgage if there is no equity remaining above the amount owed to the first mortgage holder. For instance, in the above example, there is more money owed on the first mortgage than the property is worth. In other words, there is no money left after the payment of the first mortgage to pay any junior (mortgage) lien holders; therefore, you would be entitled to strip the lien of the second mortgage, make no payments on that mortgage during your Chapter 13 and treat that loan as an unsecured creditor.
Let our office assist you today!
While we encourage loan modifications that prove financially beneficial to our clients, our firm does not handle negotiations with creditors. We have found that lenders generally prefer to deal directly with their borrowers; however, we often assist clients in determining whether or not such loan modifications will be successful. Modification of an existing loan can provide relief in a number of ways, including changing the length of loan, reducing the principal and / or reducing the interest rate.
The goal is give you an affordable monthly payment. One of the best ways to achieve this goal is to obtain a fixed-rate mortgage so you can get out of an adjustable rate mortgage (ARM). Experienced legal counsel can let you know whether this may be an option for you. Contact our firm today to discuss the situation that you face, and to begin the process of pursuing the results that you need for your future.