Mortgage companies understand that they need to be more reasonable with borrowers in financial trouble. Many mortgage companies are willing to agree to loan modifications which alter the interest rate of loans and incorporating missed mortgage payments into the mortgage loan, provided that the borrower meet certain financial standards. Unfortunately, mortgage companies have foreclosure departments which do not communicate with "workout" departments, causing mortgage foreclosures to compete with mortgage loan modifications on mortgage loans which are in default.
Borrowers who seek to modify their mortgage loans find themselves in a foreclosure setting with little time to successfully complete the loan modification before the foreclosure is finished. To the mortgage companies, whichever department (workout or foreclosure) reaches its endpoint first, causes the loan to no longer be in default. In a circumstance where a mortgage lender is attempting to foreclose at the same time when a borrower is attempting to modify his or her loan, Chapter 13 can help buy the time necessary to complete the loan modification before a foreclosure causes a borrower to lose his or her home. Some lenders claim that bankruptcy prohibits a lender from modifying a mortgage in default. However, HUD recently issued new regulations encouraging lenders to modify loans for borrowers in bankruptcy.
If you are in foreclosure and trying to modify your mortgage loan, but you are running out of time before the foreclosure is completed, and you want to know if Chapter 13 can help you save your home, make an appointment to meet with us to explore whether Chapter 13 can assist you.