Saturday, March 28, 2015

Modifying Balloon Loans in Advance of Foreclosure Process

Question: I have a home equity balloon loan that was due to be paid back in full in third quarter of last year, but most unfortunately I couldn't repay it. The loan is in the amount of a couple of hundred thousands of dollars, but has since incurred a penalty of around ten thousand, making the total due slightly higher. I have been making monthly interest only payments since then. They just transferred my loan to specialized loan servicing LLC as of early this year. My home has a substantial amount of equity in it and has been up for sale since late last year. I owe nothing else on it. How long does the foreclosure process take and do I have any legal rights where my home is concerned?

Response: In New York, foreclosure process takes no less than one year and in many cases, it can take three to five years. Even though it’s a lengthy process, I certainly do not advise just sitting around and waiting for foreclosure to happen. If you have good credit history, you can try refinancing the balloon by obtaining another loan. When you would sell you property, you will pay off the mortgage. You can contact SLS, your mortgage servicer, and inquire whether there is a possibility of modifying the balloon by giving you same terms as you would get in modifying your mortgage. In the meantime, you can try lowering your asking price to attract more buyers if your true intention is to sell the property. Best of luck!

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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