Insights from a Chicago Loan Modification Lawyer

Loan Modification in the Schaumburg Area

New rules recently took effect that change how home mortgages are serviced and modified. These new rules can help mortgage holders whose homes have dropped below the outstanding loan amount or who are no longer able to afford monthly payments under their current mortgage.  The new rules, issued by the federal Consumer Financial Protection Bureau (CFPB), took effect on January 10, 2014, and provide several new protections for mortgage holders who are having trouble making their mortgage payments.

Notification of Workout Options If You are Having Trouble Making Payments

Under the new rules, if you have missed a payment, your mortgage servicer must try to contact you within 36 days after the payment was due and talk to you about why payments are late or missing.

Within 45 days of a missed payment, your mortgage servicer must notify you in writing about mortgage workout options that may be available to you. Once your payment is 45 days late, your mortgage servicer must assign personnel to help you determine your options, but personnel can be assigned sooner if you request help.

You Can Request Foreclosure Prevention Options From Your Mortgage Servicer

If you are having trouble paying your mortgage, you can request information about how to apply for mortgage protection assistance from your mortgage servicer.

Mortgage protection assistance involves filling out a loss mitigation application. Additional documents and information will be required to establish your precise financial situation. It is important to return the application and supporting documents to the mortgage servicer by the date specified in order to get the most protection available under the new federal rules.  The mortgage servicer uses the loss mitigation application to make a list of your foreclosure prevention options. These may include:

- Temporarily suspending or reducing your payments (forbearance);

- Permanently changing your loan terms to an amount you can afford (modification); or

- Allowing you to leave your home without repaying the full amount you owe (short sale or other foreclosure alternatives).

The mortgage servicer must evaluate your eligibility for all of these foreclosure prevention options as long as your completed loss mitigation application was received by the mortgage servicer at least 37 days before any scheduled foreclosure sale.

Generally, within 30 days of receiving a completed application, the mortgage servicer must inform you in writing of your foreclosure prevention options. It also must tell you which options, if any, you did not qualify for and why you did not qualify for the option(s).

Two Options After Receiving Foreclosure Mitigation Options

1.    Accept Or Reject The Foreclosure Prevention Offer

The time for accepting or rejecting a foreclosure prevention offer depends on how far before the foreclosure sale it was submitted. For example, if you submitted a completed mortgage assistance application at least 90 days before a scheduled foreclosure sale, you have 14 days to accept or reject the foreclosure prevention offer. If you submitted the application at least 37 days prior to a scheduled sale, you have 7 days to accept or reject the offer.

2.    Appeal the Offer

If the mortgage servicer denies your loan modification request, you have the right to ask for a review of the decision if the mortgage assistance application was submitted at least 90 days before any scheduled foreclosure sale.

The appeal must be submitted within 14 days of the receipt of the mortgage servicer’s denial of your request.

You Can Call An Experienced Loan Modification Attorney For Help

Even with the new governmental rules helping borrowers, loan modifications can be tricky. Thus, as explained by one advisor, “If you do have some type of track record, and you have some time and you are savvy about these things, then you could tackle it yourself.” However, he also adds, “It’s always nice to have someone help you.”

In the Schaumburg area, you can get help from the Law Offices of Gilbert C. Schumm. We have over 35 years of experience helping people with obtaining loan modifications in Schaumburg, Illinois and the surrounding areas, including Elk Grove Village, Palatine, Chicago and Arlington Heights. If you are in Cook, DuPage or Will County, please call (847) 559-9109.