Mortgage Modification Foreclosure Louisville Kentucky Attorney
You can request a mortgage modification from your home lender. But modifications are rarely approved by banks unless it is in their best interest. The Hamp program funds some banks so that some of these are approved but it is difficult to get approval. Remember that not all banks are funded and even if they are a part of the program HAMP is a temporary program that runs out and they will only approve a modification if you show that it is in their best interest to approve it. It is rarely in their best interest to drop the interest rate or principle owed.
Commercial real estate loans are subject to mortgage modifications in a bankruptcy. Bankruptcy attorneys in a Chapter 11 or 13 can reduce the principle to the value of the property and pay any unsecured portion of a mortgage at rates as low as 1% or less over a period of five years. However, the problem is that primary residences cannot be modified. Attorneys can modify mortgage loans on rental, commercial or vacation property in a Chapter 13. First mortgages for a home residence cannot be modified in a Chapter 13 bankruptcy. Home residential second mortgages can be stripped away in a 13- if they have no equity in the home.
The president tried to change this in 2009 so attorneys could modify home mortgages. That would have allowed you to reduce a mortgage in a Chapter 13 bankruptcy to the value of your home; stop a foreclosure, stretch payments out up to 40 years, reduce interest rates to prime rates and eliminate prepayment penalties. Banks lobbied to prevent this and no one lobbied to pass the legislation so it failed. As a result, many homes went into foreclosure. In my home town of Louisville Kentucky and other cities across America foreclosures forced the values of other homes down causing even more foreclosures.
Many people financed homes in adjustable mortgage rates that started low and that raised over time, They gambled that they would be able to refinance later. When home values dropped they were unable to pay off 300,000 dollar home mortgages by refinancing homes that were worth less than the mortgage. Although rates dropped to as low as 3.5 for 30 years fixed mortgages by 8-2010 people were left with homes that could not be refinanced to take advantage of lower rates and often simply let them go back in foreclosure. In 8-2010 the foreclosure cases are still at 2009 levels and bankruptcy cases are almost back to 2004 levels. Most of this is not just due to loss of jobs. It is due to subprime lending practices that were also used in prime loans. In this section we talk about home mortgage modifications.
Nick Thompson Louisville Kentucky Foreclosure Modification Attorney
