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How can an attorney help with a loan modification?

On Behalf of | Jun 5, 2020 | Firm News

Many Connecticut residents may find themselves either behind in their mortgage payments or struggling to keep up with them.

Any number of unexpected circumstances can make it hard to keep up on home payment, including job losses, business troubles or medical and family emergencies. Even a divorce can put a Connecticut resident under the looming threat of foreclosure.

Some families may choose to seek protection through bankruptcy or may try to mount a foreclosure defense.

Others in this situation may simply walk away from their home by trying a short sale, providing a deed in lieu of foreclosure to the bank or simply by letting the foreclosure run its course.

For many families, a loan modification may be an option worth exploring.  As the name implies, in a loan modification, the bank and the borrower agree to change up the terms of the loan in an effort to get the family a monthly payment they can afford to make.

An example of a modification would be, the borrower agreeing to make, and the bank agreeing to accept, a lower payment each month over a longer term. This will mean that the bank ultimately gets more interest in exchange for taking a chance on a borrower who has run in to some temporary financial problems.

Since they are changes to an agreement, a loan modification ordinarily requires the consent of the bank. However, an attorney can still provide valuable assistance in obtaining a loan modification.

Aside from negotiating on a family’s behalf, an attorney can review the family’s legal and financial situation and give appropriate advice.

Many larger lenders also have formal and complicated processes for obtaining a loan modification, and an attorney can help families navigate this process.