Loan Modification Attorney Las Vegas Nevada
If you are having trouble affording your mortgage payments due to an increase in the payments or a reduction in your income, you may qualify for a loan modification.
In a loan modification, the lender may adjust or lower your payments to make the loan more affordable in one of three ways:
- The lender may decrease the interest rate permanently or for a temporary period of time, resulting in a lower payment.
- The lender may allow you to pay the mortgage over a longer period of time than originally agreed, thereby lower your monthly payments, but sometimes increasing the number of payments overall.
- The lender may reduce the principal or the amount you owe on the loan, giving you a lower balance and, therefore, a lower payment.
What’s more, some lenders may use a combination of these strategies to move you into a lower more affordable payment.
The Trouble With Loan Modifications
Mortgage companies will often use a loan modification as an opportunity to make even more profit from you by flipping the loan and refinancing it into an even more profitable loan. Furthermore, it is very difficult to be approved. If you are approved, the program sometimes makes your situation worse than if you had not gotten the modification.
A lender may ask you to stop making payments while you are up to date so you can apply for the program, which may cause you to fall further into foreclosure. What’s more, most modifications have a temporary lower rate or payment which increases over time, essentially being the same as other adjustable rate mortgages.
Some banks will tempt you to modify your mortgages to an adjustable mortgage that:
- Temporarily lowers the interest rate;
- Places overdue payments at the end of the note; or
- Reduces your payments temporarily.
In the long run, these mortgage modifications often make owning your home more expensive by eating up your equity. The underlying principle is banks never make a deal unless they believe they will profit by it.
This is why you should never try to get a loan modification on your own. In fact, less than 5% of homeowners who apply for a loan modification on their own achieve successful results.
Contact a Las Vegas Loan Modification Attorney
If you are struggling to pay your home mortgage and want to discuss options, you will need help from an experienced attorney. Call the Law Office Rodney K. Okano today for a free consultation. Call us at (702) 566-3600 to schedule an appointment with a Las Vegas Loan Modification Attorney. Also, feel free to contact us via our contact form to discuss how we could help you modify your mortgage loan.
Chapter 13 Bankruptcy Eliminate Second And Third Mortgages
When seeking a loan modification, you will be at the mercy of your lender. They are not required by law to modify mortgage loans regardless of what concessions you are willing to make. If you decide that loan modification is not the best route for you, you may be able to eliminate your second and third mortgages through bankruptcy.
Sometimes the poor condition of the housing market can be used to your advantage. If your house has more than one mortgage, you might be able to get rid of a second or third mortgage on your home through Bankruptcy.
A very important advantage you gain when filing Chapter 13 Bankruptcy is that if your house is worth less than you owe on your first mortgage, which is called being underwater, you may be able to eliminate a second mortgage on your home entirely. This is called lien stripping.
How Lien Stripping Works
You own a home. The home is worth $140,000 and you owe $145,000 to the first mortgage on a 5% fixed rate mortgage. You owe $50,000 to the second mortgage, but even if you sold it over the next year there would be no one who would pay more than the $140,000 it is worth today.
You could let the home your home, you just can’t see paying $50,000 more than what it is worth and an extra $700 per month when you can barely repay the first mortgage.
The Solution: You file a Chapter 13 Bankruptcy plan with language in it to strip the second mortgage. A court motion is filed to demonstrate that the second mortgage is wholly unsecured. When the lien stripping motion is successful, the second mortgage will be treated as unsecured debt that will be discharged at the end of the plan.
By filing a Chapter 13, the second mortgage is treated just like the other unsecured creditors and you may only be required to pay back a small percentage from your monthly Bankruptcy payment plan. Once you finish the plan, the mortgage company can be forced to release the second mortgage.
However, if you are not under water on your first mortgage, you must treat the second mortgage the same way as you treat the first one, by paying a certain amount to the Bankruptcy trustee each month so that you can get caught up completely on the second mortgage by the end of your Chapter 13 case.
Lien Stripping can be only be done to a residential second and third mortgage if the house is worth less than the first mortgage. Furthermore, you can only eliminate a second or third mortgage through a Chapter 13 Bankruptcy. You cannot get rid of a second or third mortgage in a Chapter 7 Bankruptcy. It should also be noted that the rules are different for houses you own, but do not live in.
Additional Benefits of Chapter 13 Bankruptcy for Removing Your Second & Third Mortgages
While eliminating the debt of a 2nd or 3rd mortgage is an exciting opportunity, most people file for Chapter 13 bankruptcy for its other benefits. Through a Chapter 13 bankruptcy, you may be able to:
- Stop a home foreclosure
- Completely eliminate Credit Card debt
- Reduce principal balance on your automobile
- Stop a wage garnishment
- Stop an auto repossession
- Stop creditor harassment
- Get a fresh start
Contact The Okano Injury Law Today
As you can see, this is a complex area of law. If you have any questions about getting rid of a second or third mortgage on your home through Bankruptcy, please contact us at the Okano Injury Law at (702) 566-3600, or contact us by using our contact form.