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.