If you are a homeowner, you may be finding yourself in a position where the mortgage is no longer affordable, whether it is due to a loss in income, a recent divorce, or perhaps large medical bills. Whatever the reason, this process is most likely frustrating since you have to repeatedly send the same documents to the lender, only to find that the person assigned to the case has changed, needing to start all over again. Further, you may be waiting for months, only to learn at the end, that the bank is not able to offer them the loan modification. This can be aggravating when you are trying your best to stay in your home.
What you may not know is that you may apply for a loan modification within a bankruptcy case. Why would you want to consider that? Because repeatedly, courts have found that the chances of getting a loan modification within a bankruptcy is far higher than without a bankruptcy. The government introduced the HAMP program, forcing many banks to make a sincere attempt at modifying a loan for debtors. Also, due to the fall in the economy since 2005, banks have found it difficult to keep up with the number of loan modification request outside of a bankruptcy. Since far fewer people file bankruptcy, many banks have a separate department of bankruptcy specialists that deals only with loan modifications within a bankruptcy. Perhaps the success rate within a bankruptcy is far higher due to the specialized attention given to each case both within the bankruptcy department, as well as the debtor’s bankruptcy attorney.
If you have been unsuccessful in attaining a loan modification, or have not even begun the process yet, discuss the issue immediately with an attorney, before it is too late. Many times, bankruptcies give you, the homeowner, more than one options on making a home affordable.