A loan modification involves changing the terms of an original mortgage contract. Like any other type of contract, both parties are allowed to submit offers and counter offers to the other party. Going back and forth with offers is all part of the negotiation. Many borrowers will avoid a lengthy negotiation because, in many cases, the terms of their original contract will stay in effect until the new terms are agreed upon. If the reason for the negotiation is to lower monthly payments for the borrower, any time spent negotiating new terms is time that the higher payments must be made or missed. Missing those payments will count against the borrower’s credit score, which affects different people in different ways.
When a loan modification offer is made, the borrower must accept or reject the offer. If the offer is accepted, the terms of the original contract will be changed on an agreed upon date and the borrower can begin making their lower monthly payments. If a loan modification offer is rejected by the borrower, they must submit a counter offer. This time can become quite lengthy, which is a fact that many lenders will try to exploit. They know that most borrowers don’t have the patience to wait for a better offer and that most desperate borrowers will leap at the first offer they get. Another thing that lenders will exploit is the lack of mortgage knowledge that the borrower possesses. Lenders know that the real estate and mortgage experience of most of their borrowers does not extend beyond their monthly mortgage payment. When a borrower chooses to hire an experienced real estate or foreclosure attorney to represent them, they essentially make it more difficult for their lenders to take advantage o f them. The lenders know what a good and fair offer is, and a good real estate or foreclosure attorney will know what a good offer is, but borrowers are often clueless as to what a good loan modification offer is. When the lender sees that their borrowers refuse to be pushed around and taken advantage of, they usually tend to be more cooperative and willing to negotiate fair terms for a loan modification, and not just make “sucker offers”.
Any person who tells you that an attorney is not required to successfully modify a loan is right; a borrower can choose to perform the entire negotiation by themselves. Chances are, however, that borrowers who lack legal representation are not getting the best possible loan modification offer that they can. Many unrepresented borrowers will justify the lack of representation as a money saving tactic, but when compared to how much money could be saved over the length of the modified loan, the cost of an attorney often becomes an expense that pays for itself over time. In any type of negotiation, not just those centered on modifying a loan, individuals represented by experienced attorneys often make out much better than their unrepresented counterparts. Be aware that lenders invest thousands of dollars into their legal staff, and they don’t do it for nothing. With that in mind, why wouldn’t a borrower take every step possible to level the playing field?
For more information on fighting your loan modification offer, contact attorney Gary Dote at McFarlin LLP today.