Friday, April 27, 2012

Loan modification for homeowners, who have just recently regained employment

Question: My mortgage was transferred from first bank to second bank in December 2011, I lost my job at the end of that month. My mortgage is current through January. I contacted HOPE in January to assist me while I looked for employment. I sent countless documents to HOPE, who in return sent them to the second bank. The second bank, however, has not been effective in trying to help me stay in my home. They have said I am ineligible because I am receiving unemployment benefits. I have asked about the Unemployment Program listed under the Making Home Affordable Act (HAMP) and I was told that I am ineligible even before the list of documents was sent from HOPE. I just recently landed a full-time position in public sector, which I am about to commence very soon. I told the second bank this, in hopes to stave off the foreclosure process, but I was told that the foreclosure process will begin shortly. I want to stay in my home. My new job will produce less income than my previous job, but with a lower interest rate, currently I am above 6%, I feel I just need a little time. I was never late nor missed a payment while I was employed and I feel that the second bank is just going to continue to regard me as ineligible for loan modification or any other assistance. Please, tell me what options I have to stay in my home.

Response: It is unclear if the second bank is about to set a foreclosure sale date or commence a foreclosure? Your home cannot be foreclosed upon until the bank exercises its legal right by suing you in court as a result of the default under the terms of the Note and Mortgage. If you have not gone through the lengthy court foreclosure process, then the second bank cannot be setting a meaningful foreclosure sale date any time soon. If, however, the bank initiated its foreclosure action a long time ago, then it is likely that a foreclosure sale could take place shortly. If that is the case, then you may want to consider filing for bankruptcy to stop foreclosure and you can even try to obtain a loan modification through the Bankruptcy Court. On a different note, if you just started your job this month, then you would not have enough financial documents to verify your income. You would have to wait 2 months, get 30 days of pay stubs and 2 months of bank statements, along with all the forms, and most recent tax returns and try to submit the documents again. It is very hard to get a permanent loan modification when you are unemployed because then you obviously show unaffordability of the monthly mortgage payment to the bank and the last thing the bank wants is another default. Unemployment program under Making Home Affordable Program (HAMP) is a temporary solution. To get the monthly amount reduced permanently, you need sufficient income. Now that you are employed again, there is a great chance of success to your story.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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