Information you need to know about Home Modifications

We discuss the process for modifying your home's mortgage, and other options for avoiding foreclosure.


I want to talk a little bit today about a problem we've seen in this office, which is namely how to modify your home mortgage.

The federal government right now has a voluntary program between the mortgage company and you, the consumer, under what's called the HAMP program. This stands for Home Affordability Modification Program.

The mortgage companies, which are mainly the larger ones such as Bank of America, Wells Fargo, Citi Financial, Chase, PNC, all have agreed to voluntarily work with you the consumer to try to lower or modify your mortgage payment.

The mortgage companies really do not want your home because the values in your neighborhood are declining because of the recession.

What they do want is to try to allegedly avoid foreclosure. Many of you have tried to modify it. You've called the mortgage company, you go through three levels of phone calls, and then you submit paperwork.

We've seen many of our clients submit paperwork with the mortgage companies unexpectedly, and unexplainably, lose the paperwork. This appears to be a pattern because the modification program is completely ill-managed.

What I suggest doing is try to modify your mortgage but do not get frustrated by the process. Always keep your payments regular until they agree in writing that they will modify your mortgage.

The problem is, if you do not make your mortgage payments, they still can have your mortgage on the foreclosure track. So many times we have seen clients who are facing a foreclosure coming in who are telling us that their mortgages are being modified.

The problem we see is that the servicing companies that are working with these mortgage companies also get a fee if they foreclose. So therefore it becomes in the best interest of the mortgage company to actually foreclose on your property rather than modify the mortgage.

This program is causing a great deal of distress with our clients. Missed phone calls, lost paperwork, and the fact that the mortgage company will tell the client that there's no problems with losing their homes, then there'll be a foreclosure set. This can be a cause of great stress in your life.

What I do suggest is you try to get with the mortgage company and get it in writing. If you are behind on your mortgage and they are threatening any form of foreclosure or any action, and you want to keep your home, make an appointment with us at Mayer & Newton, and we can look at your options.

Chapter 13, if you are behind on your mortgage, that is Chapter 13 of the Bankruptcy Code, is always an option. One thing you must remember about Chapter 13 bankruptcy is it will not allow you to lower your mortgage payment from what you originally signed, but it will allow you to catch up what you're behind over a three-year to five-year period.

That usually is a good option for people. It takes the stress off you, it gets the bill collectors off your back, stops phone calls, allows us to adjust your car loan to a lower interest rate and sometimes to a lower payment.

I think if you are concerned about your mortgage, call the office of Mayer & Newton for a free consultation. Thank you.