California Loans News

California has one of the highest rates of foreclosures currently, resulting from the severe real estate recession. Coupled with rising unemployment, and a recipe for financial disaster is occurring for many.  Loan modifications in California are becoming a more common solution, though not a simple one to come by.

Most mortgage banks or lenders use the same loan modification criteria in California.

• Proven financial hardship, such as death, divorce, loss of job, military service, severe illness, and other.
• The financial duress caused by the said hardship.
• Debt to income ratio as a result of the said hardship.

A loan modification in California is not a simple solution.  An extensive application process is required with numerous documentation.  The terms of the original loan agreement are changed based upon the financial criteria presented to create a payment plan the homeowner can afford.

Contacting a lawyer who specializes in mortgages is the first step, along with being incredibly upfront about the situation.  This person will work to find the best option, whether it is extending the loan for a longer period, dropping the late fees, or settling for less than the full amount owed.  Lenders don’t want to head into foreclosure on a home – after all, they are losing money as well.  It costs lenders more to send out collections and potentially end up with nothing.  Banks and mortgage companies are most likely willing to work in some capacity with the attorney to prevent defaults or bankruptcies.

Ask a loan modification specialist in California to find out what the best options are.  The loan modification will affect one’s credit score, but with a successful payment plan, that score may go unchanged or go up.  A loan modification does not have to have a long term adverse affect, and is still better than the alternative of losing the home.

California mortgage modifications have been in the news for the last several months as millions of homeowners faced or face uncertainty about their ability to continue paying their mortgages.

Nose-diving home values, skyrocketing unemployment, increased taxes and ballooning payments have led many homeowners to the brink or past the brink of foreclosure and bankruptcy.  Many California homeowners were saved by getting a mortgage modification and many more will.  But is a mortgage modification your only option?

As with any major financial and legal decision it is important to consider both your short-term and long-term goals before knowing whether or not a California mortgage modification is right for you.  For some homeowners there may be better decisions ranging from: foreclosure defense, bankruptcy, deed in lieu of foreclosure, refinance, reverse mortgage or short sale.

A licensed attorney in California can explain these options to you and review with you the pros and cons as they relate to both your short-term and long-germ goals.  Some homeowners have legitimate foreclosure defenses.  Others may find that their best course of action is to sign the deed of their home over to the lender rather than fight a foreclosure or seek a mortgage modification.

Bankruptcy may be a viable option but again this will depend on both your short-term and long-term goals.  A reverse mortgage for seniors may be a viable option where you start pulling equity out of your home rather than try to make payments for it.  A short sale is when the bank agrees to let you sell the property for less than its value and wipe out the rest of the debt owed.

It is important to know all of your options.  Lenders will not present to you your full options because their primary object is doing what is best for the bank, not for you.  Typically the only person that will look out for your interests, aside from yourself, is your attorney.

If you have questions or want to know alternatives to a California mortgage modification you should find a licensed attorney in California.