Frequently Asked Questions About Loan Modification and Violations by Your Lenders: Are You Having Trouble With Your Mortgage?

Are you having trouble with your mortgage? Has it adjusted and you cannot afford the new payment? Were you placed into a bad loan and you can’t refinance into a good one.

Has There Any Truth in Lending Violations? (TILA)

The first thing that a homeowner should do is identify that the mortgage on their current property is a lawful one. This is to find out if there there are any violations of TILA or RESPA. We explained what are TILA and RESPA in our website.

#1 Homeowner Tip: Have an experienced mortgage law attorney examine your loan documents for these potential violations.

#2 Homeowner Tip: Let an experienced attorney find out if there are any junk fees, bogus fees added in your loan which had violated any of the provisions of TILA or RESPA? The important part is played by your Annual Percentage Rate (“APR”). Did your lender hide a prepayment penalty? Did you see your notice to right to cancel? How many days are provided in such notice? Your lender cannot curtail the number of days in such notices. Whether it is Three Days Right of Rescission or more than that? If there is any waiver, it is a clear cut violation of both TILA and RESPA.

The borrower must be told of this right in writing.

If the creditor fails to properly provide notice of this right to cancel, the right of rescission may be extended for up to three years. Yes, this is the law.

When the right is extended for three years you can rescind the loan at any time before three years, meaning that the loan is treated as if it never existed. Essentially, you become entitled to all profits made by the creditor as a result of this loan. This means that the creditor must refund all interest paid, all closing fees, all broker fees, and even pay for your attorney fees. As you can imagine, this amount can be quite significant.

The Rescission is a Powerful Tool for Borrowers.

The extended right of rescission is a powerful tool to help borrowers who have been victims of predatory lending, and helping our clients exercise this right is often the first step in holding a creditor responsible for illegal behavior.

If it is determined that no laws have been violated on your mortgage, then it’s time to approach your lender for a possible loan workout or loan modification.

The factors they will look at are:

1. Nature of Hardship Causing Your Mortgage Problems?

2. What is Your Ability to pay?

3. How Much Amount Owed on your property?

4. Is There Any Equity in the Property?

5. Are You Currently Employed?

6. What is Your  future financial situation?

7. Balancing?  To foreclose or pursue a loan workout with you or modify your loan.

 Answer: Simple Commonsense.

 Remember: The Banks Does Not Want Your Property.

A loan workout or loan modification generally occurs where the parties to a problem loan mutually agree to workout the problem by creating new and better loan terms. The hope is that the new loan will enable the borrower to meet new obligations more comfortably and without any delinquency. When applying for a loan modification, make a game plan on how exactly you are going to approach them. These people are trained in minimizing loss for their company and they get paid to by getting the most amount of money out of you as possible or declare that your case is un workable and foreclose on you. That is how they mitigate loss. If you understand this, then you’ll know that you have to approach them and all conversations very carefully. Everything can and will be used against you.

Why Chapter 7? 

Chapter 7 bankruptcy cases move relatively quickly, and you may receive your discharge in just a few months. A discharge will eliminate unsecured debts like credit card debt, medical bills, most personal loans, judgments resulting from car accidents, deficiencies on repossessed vehicles, some older tax debts, payday loans, and garnishments. Certain debts are classified "non-dischargeable debts" and cannot be discharged, or can only be discharged under very specific circumstances. These include child support, most student loans, and many tax debts.

Is Filing bankruptcy right for you?

We'll help you schedule a free consultation with  an attorney who may assess your financial situation, discuss your legal rights and further explain why Chapter 7 bankruptcy may be the right option if you:

• Have no income or low income
• Have little or no money left after paying your necessary living expenses each month
• Rent or have little equity in your home
• Have few assets (or no assets) outside your furniture, clothing and other necessities.

The Law Requires You Must Receive a Credit Counseling

The law requires that you receive a Credit Counseling Briefing from a certified credit counseling agency before filing bankruptcy, regardless of whether you're filing Chapter 7 bankruptcy or Chapter 13 bankruptcy. The agency will explain financial management and how to do a budget analysis, and will also discuss alternatives to filing bankruptcy. While there are some hardship exceptions to this rule, most debtors will have to get this briefing, and failing to do so before filing may result in your case being DISMISSED. Your Chapter 7 bankruptcy lawyer may refer you to the appropriate agency.

The Law Requires You Must Receive a Credit Counseling

The law requires that you receive a Credit Counseling Briefing from a certified credit counseling agency before filing bankruptcy, regardless of whether you're filing Chapter 7 bankruptcy or Chapter 13 bankruptcy. The agency will explain financial management and how to do a budget analysis, and will also discuss alternatives to filing bankruptcy. While there are some hardship exceptions to this rule, most debtors will have to get this briefing, and failing to do so before filing may result in your case being DISMISSED. Your Chapter 7 bankruptcy lawyer may refer you to the appropriate agency.

What is a Mean Test?

Before filing for Chapter 7 bankruptcy, you will have to qualify through a Chapter 7 means test. Although there was a lot of media hype about the Chapter 7 bankruptcy means test disqualifying people from filing for Chapter 7 bankruptcy when it was introduced in 2005, the truth is that more than 96% of potential Chapter 7 petitioners still qualify. In the unlikely event that you are one of those few who do not, filing bankruptcy may still be an option; this time in the form of Chapter 13 bankruptcy. Here are some reasons why filing Chapter 7 bankruptcy may not work for you

Calculating disposable income and unsecured debts is the second step of the Chapter 7 means test. If your disposable income over the next five years is less than $6,000 ($100/month), you "pass" the Chapter 7 bankruptcy means test and can thus file for Chapter 7. A local bankruptcy attorney can further explain how disposable income is calculated. If your disposable income during that five year period is greater than $6,000 but less than $10,000, you may still be able to file for Chapter 7 bankruptcy protection, depending upon your allowed expenses.