You need to be aware that if foreclosing proceedings have begun and your application has been denied, you may not have enough time to submit a new application andre-apply especially if a trustee sale date has been scheduled.
According to a recent government report, nearly 50 percent of loan modifications approved under HAMP are back in default. With our current economy still in distress, there are still thousands of homeowners who are at risk of losing their home. Of course, the declining job market is not helping. For example, a lot of people who used to be employed when they applied for a loan modification have experienced a significant reduction in income that they can no longer afford to make their modified house payments. So what do you do if you were in this situation? More specifically, how many times can one apply for loan modification?
Some homeowners, in their attempt to just put their mortgage problems behind them, will immediately accept the first offer received from their lender. I understand why this happens. Considering the amount of time spent between sending documents and making repeated phone calls to the lender, a lot of people are just glad to get an acceptance letter hoping that their nightmare has finally come to an end. However, there are a lot of instances where the modification only brings the account current but with no significant change in the terms of the loan so that the monthly payment is either almost the same or even higher. How can this really help the homeowner then? If a financial hardship originally caused you to default on your mortgage payments because they were unaffordable, how could you afford the modified payment if you are still experiencing the same financial hardship?
Whether or not you can re-apply will depend on your lender or servicer and the type of modification you are applying for. For example, if you’ve had a prior approval under HAMP, you may need to wait 12 months before you can submit a new application. However, if your prior approval was for an in-house loan modification, there may be no waiting period as long as you can establish that a change in your financial circumstances merits a new review of your case and a new application. But be very careful: Rejecting the bank’s current offer to you, especially when you’re already in foreclosure, may not be a good idea unless you can re-apply. Thus, you need to contact your lender before doing anything.
Again, you need to be aware that if foreclosing proceedings have begun and your application has been denied, you may not have enough time to submit a new application and re-apply especially if a trustee sale date has been scheduled. Thus, it may be in your best interests to file bankruptcy to stop the foreclosure and buy yourself more time. You can still apply for loan modification even after your bankruptcy is filed. Of course, you need to understand the pros and cons of such an alternative. Seek the advice of an experienced bankruptcy attorney to understand all available options.
If you are facing foreclosure and/or are experiencing serious debt problems and don’t know where to turn for help, call our office so we can help you determine whether Bankruptcy is right for your situation. In some cases, it may not be. For more information and to schedule a free consultation, please call Toll-Free 1 (866)477-7772. Let us evaluate your situation and recommend possible options. We have offices in Glendale, Cerritos, West Covina, Valencia and Riverside.
* * *
None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.