Loan Modification Denials in Arlington Heights

Recently, a Huffington Post article reported that 80 percent of homeowners unable to keep up with mortgage payments are unable to obtain a loan modification under the federal government’s Home Affordable Modification Program, known as HAMP. Created by Congress in an attempt to help struggling Americans keep their homes, HAMP is just one of many options available from a homeowner’s lending institution. The guidelines and eligibility requirements under this program are strict and, consequently, not everyone can qualify for the program. If you or someone you know is having trouble making mortgage payments, contact a Chicago loan modification attorney for guidance as to alternatives available in Illinois.

Qualifying under HAMP

A loan modification is a renegotiation of a struggling homeowner’s original loan terms, often resulting in a reduction in payments due to a lowered interest rate and principal amount. A successful loan modification avoids foreclosure of the property and, therefore, allows the owner to remain in the home. Before inquiring as to whether or not a homeowner qualifies for a loan modification under HAMP, the owner of the mortgage must be determined. If the home loan is owned, insured, or guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Authority (FHA), the U.S. Department of Agriculture (USDA) or the Department of Veterans Affairs, the HAMP program is likely available. More than 70 of the country’s large and small mortgage companies participate in HAMP. Eligibility requirements under HAMP include:

• A mortgage obtained on or before January 1, 2009;
• A loan balance of up to $729,750 on a primary residence or a 1-to-4 unit rental property;
• Demonstrated financial hardship; and
• No convictions within the past 10 years in connection with a real estate or mortgage transaction of: felony larceny, theft, forgery, tax evasion, money laundering or fraud.

Reasons for Denial

There are two main reasons as to why a borrower is denied a loan modification under HAMP.  First, in order to qualify for a modification under this federal program, the simple task of completing and submitting all of the required documentation to the lender is essential.  Understanding the lender’s guidelines and providing exactly what is requested will increase the likelihood of an approval. Second, mortgages are denied loan modifications because the loans do not satisfy the program requirements such as debt and housing ratios imposed on the borrower by HAMP. Too much income will make it difficult for a distressed borrower to show financial hardship while too little income will cause the lender not to take on a borrower at a high risk of defaulting again.

Loan Modification Assistance

The specific guidelines and mandates required under the federal loan modification programs are complicated. Don’t navigate this process alone. If you or someone you know is having difficulty making mortgage payments and would like to inquire more about loan modification, contact an Arlington Heights loan modification attorney today for assistance with defending your home. The Law Office of Gilbert C. Schumm has guided clients through the loan modification process for years and provides legal services to the greater Chicago areas. If you are located in Arlington Heights, Hanover Park, Hoffman Estates, Mt. Prospect or Rolling Meadows, contact (847) 559-9109 today to speak with an experienced and skilled attorney.