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Loan Modification Attorneys

A Home Loan Modification can help you stop foreclosure and stay in your home. But if you’re like most homeowners, you’re probably wondering how it will affect your credit, and whether in a good or bad way. Unfortunately, there’s no single answer—it all depends on how far behind you are and the kind of mortgage loan modification you’ll be granted.

Best-case scenarios

Technically, since you’re not borrowing any money, a home loan modification won’t hurt your credit score. If you’re paying less in interest, you have a smaller debt burden. And since most lenders prefer an interest rate reduction, there’s a pretty good chance that a Home loan modification will improve your credit score.

The implications are even better if your lender forgives part of the principal, although this is less common. If they write off $50,000 from your loan amount, it will show up on your report as a smaller loan, which can increase your credit score.

The lender factor

Unfortunately, it doesn’t always happen that way. It also depends on how your lender reports the home loan modification to the credit bureaus. Many of them will consider it paid for less than the original amount owed, which will count against your score. If you’re already in foreclosure, the impact on your credit can be substantial. Of course, compared to a short sale or a foreclosure, a Mortgage Loan Modification is still the best way to maintain your credit standing.

Tax implications

One of the early problems with Loan modification is that the amount forgiven is usually taxable. That means if your debt is reduced by $50,000, the IRS views it as income and imposes the corresponding tax. This can catch homeowners off guard during tax season, as many of them don’t know the tax implications at the time of the modification.

To avoid such incidents, the IRS announced in 2007 that Loan modification would no longer be classified as “prohibited transactions.” This applied to all loans originated from January 2004 to July 2007, the peak of the sub-prime boom, and those due to adjust from January 2009 to July 2012. If your mortgage falls under these categories, you won’t have to file a 1099 declaring the change as taxable.

A loan modification is much like going to court: you can save your money and get a court-appointed lawyer, or you can invest in professional representation and get the best mortgage assistance. Your loss mitigation won’t happen overnight, but if with a capable Loan Modification Attorney, you can be sure you’re in good hands.

About the Author:

Loan modification Department helps you legally change the terms of your mortgage so that you can pay it off better But you can't expect lenders to make it easy. In fact, many homeowners fail to reach a reasonable settlement with their lenders, and even those who do have to settle for less-than-satisfactory setups.That's where your loan modification attorney comes in.

Source - Home Loan Modifications and Your Credit Score

Home Loan Modifications

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Loan Modification Free Help

Question: What is the best, easiest and most successful way to get my mortgage loan modified, i.e. lower interest rate?

I was out on disability for about 2 months, I contacted my mortgage co (citimortgage) and they suspended my payments for 3months...I'm now back to work and working on a loan modification since the rates are so low and buyers are being offered this option. However, it's been about 4 months since my payments were suspended and still no loan mod. On the positive side I'm almost totally debt free, but I would like to start making my payments again, at a lower rate of course.

Answer: Try these forums:

http://www.loansafe.org/forum

LOAN MODIFICATION FREE HELP

Mortgage Modification Qualify

Question: Anyone ever do a Mortgage Modification? How was your result?

We have a 1st mortgage & equity line of credit (maxed) and about $1500 revolving credit balances each month (not including utilities, food and incidentals) with not enough coming in to support it. Looking for a lender in hopes to refinance the 1st & ELOC with no avail. Thinking of asking our current lender to do a Mortgage Modification but not sure if we will qualify. We need to lower our 1st & ELOC to be able to start paying on the credit cards but it's a lose, lose situation. My husband is talking bankrupcy...we've never been late on any payment but it's now coming close. We have 2 kids & a beautiful home...I'm scared. I've been trying to get a job but no one is calling back. Even with that, what I'll make will only cover groceries and gas for the month.

Answer: I would look at this from all angles. You probably can't get a refi or modification because your debt to income ratio is too high. You should try to look at locking your HELOC, call them to see if you can lock at a lower rate/payment. Call your credit card companies to see if you can lower your interest rate. This can help lower the min payment and allow you to pay more.

Look at what can be cut from your budget ( those incidentals add up), sometimes we really don't know where our money goes. Try taking lunch to work. Carpool. You can also take on odd jobs like walking dogs, babysitting on weekends or if you have a hobby, turn that into a part time job. Do research online. There are many places that you can get other ideas. Also, bankruptcy will not be much easier as if you want to keep your home, you would have to continue to make those payments anyway. All it does is restructure payments. You can file on the unsecured portion but you won't have any credit for a long time, You should have an emergency savings if you don't have credit or you will be back in the same situation. Additionally, $1500 in credit card debt is not a lot considering the national average.

Try Yahoo finanance for more information and suggestions. It is workable, you just have to tighten your belts. I know, I have been there and worked my way out.

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