Mortgage Modification

Melbourne Florida Mortgage Modification Attorney | HAMP, Fannie Mae / Freddie Mac Loan Modifications.

Many homeowners in Brevard County are still experiencing financial difficulty after the economic downturn in 2009. Although much of the country has rebounded, many Brevard County residents are still finding it difficult to find jobs with sufficient income to pay their mortgage and other living expenses. Over the last 6 years, Bowin Law Group has consulted thousands of Brevard County residents on ways to reduce their monthly expenses to account for their reductions in income. One of the primary ways of reducing these homeowners' monthly expenses is to obtain a mortgage modification to reduce their monthly mortgage payment. There are several loan modification programs, federal and private, that homeowners can still take advantage of if they act quickly. Our Melbourne Florida Loan Modification Attorney can discuss these programs with you and even help you apply for loan modification assistance.

One of the major mortgage modification programs that homeowners can take advantage of is the Home Affordable Modification Program, otherwise known as HAMP. With all its complexities, the goal of the HAMP program is actually very simple. The goal of the HAMP program is to reduce a borrower's mortgage payment to 31% of the borrower's GROSS monthly income (income before taxes). For easy math, imagine a borrower with gross income of $10,000 per month. Under the Home Affordable Modification Program, the borrower's monthly mortgage payment would be $3,100 per month. It's just that simple. If the borrower's payments are already less than 31% of their gross income, HAMP won't do anything to reduce the monthly mortgage payments.

One of the failings of the Home Affordable Modification Program is that it only looks at GROSS income. HAMP does not consider NET take-home pay. Nor does it consider the borrower's other monthly expenses. Since the HAMP program is seeking to make the borrower's mortgage payments affordable, failing to consider net take-home pay and necessary monthly expenses seems to be a gaping hole in the program. How can anyone know what monthly mortgage payment you can afford unless they know how much you actually bring home after payroll deductions, or what your other expenses are. Maybe you have required 401k withdrawals from your paycheck. Maybe you are paying alimony and child support or healthcare and educational expenses for your children. Maybe you have a child with special needs, or you have exceptionally high medical expenses and credit card debts. Unless we take all of these factors into consideration, there is no way to know what you can actually afford to pay on your mortgage.

Even with this major flaw in the HAMP program, the program has helped many homeowners reduce their mortgage payments and save their homes from foreclosure. However, even though HAMP is usually the first program your lender will consider in determining whether to modify your mortgage, there are other loan modification programs available to borrowers. These other programs often result in better mortgage loan modifications than the HAMP program.

Every lender has its own internal or "In-House" loan modification programs they will consider when you submit a mortgage modification application. Unlike the HAMP program, these In-House loan modification programs consider the borrower's NET take home pay (rather than gross income). The In-House loan modification programs also consider the borrower's necessary monthly expenses for things such as car payments, food expenses, health care expense, insurance, credit card payments, day care, utilities, cable bills, phone bills, student loans and other monthly expenses. By comparing the borrower's take-home pay to the borrower's monthly expenses, the lender can see what money the borrower has left over every month. With this information, the lender can determine whether a modification is warranted and, if so, how much to reduce the mortgage payments. Once the lender determines the affordable monthly mortgage payment, the lender can then adjust the mortgage terms to get the desired monthly payment. The lender can either reduce the interest rate, extend the number of years of mortgage payments, reduce the principal amount of the loan, or a combination of these three alternatives. Once the loan is modified, the borrower will be considered current on their mortgage. The borrower is not typically required to make a lump sum payment to cure the past due mortgage payments.

If you are considering requesting a mortgage loan modification from your lender, the Bowin Law Group may be able to help. Call our office to schedule a free consult with our mortgage modification attorney to determine whether you are eligible for a loan modification.

Bowin Law Group. Brevard's Hometown Law Group.