Asian Journal- The Filipino-American Community Newspaper

Question: What is my best option if I am late in payment of my mortgage?

Answer: The best help available is loan modification. Under the Obama plan, you may request that your loan be modified so that your monthly payment will be equivalent to 31 percent of your net take home pay.

Answer: Loan modification is a legal process and you need protection of your rights. Attorneys are experienced negotiators and will be able to give you better deals than doing the loan modification yourself.

Answer: The first thing to do is to consult with an attorney to determine how much time is left. A loan modification can still be made even if a Notice of Default is received. Do not wait until the last three months before sale date. Under California Foreclosure Prevention Act (CFPA) you are given three months to modify your loan or you may lose your home. The CFPA is a new law that may preclude a foreclosure sale for an additional 90 days beyond the current law requirements in order to allow the borrower and lender to pursue loan modification. Under the existing law, once a Notice of Default has been recorded in the County Recorder’s Office, the borrower has a 90-day period of redemption. If not redeemed, the lender will publish the foreclosure date within 20 days after the 90-day redemption period has elapsed. Thereafter the lender may foreclose in 21 days after publication. Hence, under current law there is a minimum of 111 days from date the Notice of Default is recorded to foreclosure date. With the new law, an extra 90 days will be added to the 111 days making it a total of 201 days from the date Notice of Default is recorded to auction date.

Answer: Yes. Loan modification is for every homeowner experiencing hardship in payment of their mortgage because the interest is too high, the property value has gone down and the mortgage is interest only loans.

Answer: Generally all lenders are willing to modify your mortgage because they will lose more money if they foreclose on your home. The Obama Administration is trying to encourage all lenders to participate in the loan modification plan of the government with incentives if they participate.