Having Experienced Legal Help Is Important For Loan Modification, Chapter 13 And Other Alternatives For Homeowners

MSNBC.com is reporting that the government’s loan modification programs are falling short of their goals. Here is the article.
This highlights the need for experienced legal counsel. I am still surprised by the number of new callers to my Manhattan law office who tell me that they have already paid an out-of-state “loan Modification consultant” a fee, often $3500 or more, only to find that the out-of-state company will not return their calls and has done very little or nothing at all to help them.

Trying to modify your home mortgage loan is difficult enough without compounding the problem by hiring an out-of-state non-attorney who is illegally attempting to practice law in the state. New York homeowners who are contacted by out-of-state companies, particularly those calling or e-mailing from California or Florida, are strongly cautioned to ignore them. It is a mistake that can cost the homeowner or home and precious time. I’ve blogged on this before, including investigations that are pending against these types of companies and why their conduct is illegal in New York. While having an experienced attorney on your side will not guarantee that a lender will agree to modify a mortgage, it is certainly better than trying it on your own or ending up being scammed by some out-of-state company.

In New York, in both the Eastern and Southern District Bankruptcy Courts, homeowners who qualify can now file for Chapter 13 and apply for a mortgage loan modification during the bankruptcy case. Many homeowners find this helpful because it allows them the opportunity to also resolve unsecured debts such as credit cards and because it gives them the protection of the automatic stay law (11 USC 362) which prevents foreclosure and other lawsuits and protects their home. An experienced attorney will advise a homeowner about this alternative and others that might be available and will not treat the loan modification process as merely filling out some forms. In addition, although an out-of-court loan mod application will not by itself stop foreclosure, unless and until it is approved in writing, an experienced attorney may be able to get a lender to at least agree to voluntarily postpone a foreclosure sale, as my office has done many times.