Last Fall, Nevada’s foreclosure rates ranked among the highest in the nation; many of these foreclosures could have been prevented via a loan modification with the lender. Modifying a loan with the lender allows the borrower to remain in possession of the property while new terms are laid out and agreed to.
Homeowners who at risk of foreclosure should contact a Nevada real estate attorney to begin the process of modifying their loan. The sooner this process begins, the sooner new terms can be arranged and the accrual of interest and penalties can be stemmed. It is not something that should be considered as a last resort, rather it is something that should be pursued as a first course of action.
In Nevada, there are many options that lenders may consider when a borrower requests to modify an existing loan. These options include interest rate reductions, extending the length of the loan, or changing the type of mortgage from an Adjustable Rate Mortgage (ARM) into a 15 or 30-year fixed mortgage.
When considering a borrower’s request to modify a mortgage, the lender will consider the reasons for the request. These may include disability, divorce, loss of income, severe illness, or job relocation. When an individual applies for a loan modification, they need to provide supporting evidence that shows how the hardship has made it impossible to satisfy the monthly mortgage payments.
A Nevada real estate attorney can help prepare the paperwork and negotiate with the lender on behalf of the borrower. Because lenders are under no obligation to accept a loan modification request, it is essential to hire an attorney to help prepare the paperwork and conduct the negotiations. This can help protect a borrower’s rights and increases the likelihood that the lender will accept the modification request.
The benefits of undergoing a loan modification are well-worth the effort and can stop the foreclosure process once and for all. These benefits can include lowered monthly payments, obtaining a fixed interest rate, reducing the loan balance, and waiving of past due interest and penalties. The impact each of these modifications can have on an individual’s finances can be considerable and can alleviate the risk of foreclosure down the road. Because of the significant impact a loan modification can have on an individual’s finances, it is a process that should begin as soon as a homeowner falls behind on a mortgage.