What To Expect When Applying For A Loan Modification In Maryland: A Guide For Residents Of Howard County

In this article, you’ll discover:

• The reasons why you might apply for a loan modification.
• How to meet the loan modification application criteria.
• The biggest challenges clients face in the loan modification process.

What Are Common Reasons To Apply For A Loan Modification?

Typically, you would apply for a loan modification if you are behind on your mortgage payments. You are looking for a reduced payment amount, interest rate or a longer term to repay your mortgage.

Sometimes, the mortgage company will do some or all of those things. They’ll consider the status of payments when the loan modification was approved and then factor in the payments that you’ve missed. They’ll then put them either at the end of the loan or else recapitalize the loan and include that amount in the mortgage itself.

The advantage of the loan modification is that, through that process, you can do things you can’t do in bankruptcy. The downside is that a loan modification is not always approved. Loan modification can be a gamble, but if it works, it can do a lot to help you as a homeowner.

What Criteria Are Required For A Loan Modification In Maryland?

As a homeowner, you typically need to be behind on your mortgage payments. There are different guidelines, and each lender has different programs they offer.

Lenders are usually looking for someone who can’t make their current mortgage payments and has had a hardship that would necessitate the loan modification. They’re looking for you to repay the new mortgage payment amount you’re being offered. They’re also looking to ensure that the mortgage amount can be paid off over the loan term or extended term with that new payment.

Usually, these loans are 30 or 40 years long at maximum. In some cases, if you couldn’t afford your home mortgage payment even after a lender made adjustments, you simply would not qualify.

When a lender is looking at a loan modification package, they ultimately have the final say as a business decision on whether or not they approve you. Even if you meet all the criteria, a lender could still potentially not approve you if they consider you to be too great of a risk.

Owner and Senior Attorney Alon Nager is an experienced lawyer with offices in Columbia, Annapolis, and Towson, MD. He’s helped many clients like you navigate the intricacies of bankruptcy law. With over 17 years of experience, he is prepared to provide you with appropriate bankruptcy solutions so that you can get back to business.

Still have questions? Ready to get started? Contact Nager Law Group today to schedule an initial consultation.

We Are Here To Help. Call Today For An Evaluation: (443) 492-9003

How Long Does The Loan Modification Process Take In Maryland?

On average, loan modification takes about 90 to 120 days, though this process could take longer or shorter. You may find it difficult to get confirmation from the lender or servicer that they have received all requested documents. If they don’t receive everything, you must constantly update pay stubs, tax returns and bank statements.

Sometimes, it becomes a process where you constantly submit information to the lender. Depending on how busy they are and how their review process works, a modification can take longer.

What Are My Options If I’m Denied A Loan Modification?

You and your attorney can file an appeal and see if that gets approved or look at other options like bankruptcy or a short sale.

During the appeal period, resubmit a new package if your circumstances have changed or if paperwork was missing from the initial submission. Sometimes, the servicer will change, and your new servicer may be more amenable to doing the loan modification. The lender may also change, and that can increase the likelihood that you might be approved.

What Are The Most Common Challenges Clients Face During The Loan Modification Process, And How Do You Support Them Through Those Obstacles?

There are many mistakes people make when they’re applying for a loan modification on their own. The most common mistake is putting together a budget that shows you can’t afford the mortgage payment required to pay the loan off over the term. This would lead to an outright denial.

There’s an art to putting together a budget. That’s why allowing an attorney to handle budgeting is worthwhile: We’ll ask the tough questions about where your money is going. We’ll also check to see if there’s anything you can cut out of your budget to improve your financial optics.

Sometimes, people spend money on things they don’t need. We can review some of that and finesse your budget to make you a stronger candidate for modification

The most common challenge is often getting confirmation from lenders and servicers that they’ve received everything that you sent. Every time you call, there’s a new person involved.

Often, we try to get a loan modification through the foreclosure mediation process. The advantage is the lender or servicer has an attorney as well, and we can send confirmation through their attorney so that the lender doesn’t lose anything or fail to acknowledge receipt of the required documents.

Still Have Questions? Ready To Get Started?

For more information on What To Expect When Applying For A Loan Modification In Maryland, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (443) 492-9003 today.