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.

The Essential Role of an Attorney in a Chicago Area Real Estate Transaction

Whether buying or selling property in the Mt. Prospect, Hanover Park or Arlington Heights area, a real estate attorney is essential to ensure your rights and property interests are protected before, during and after such a complex transaction. Although opinions may differ as to whether or not an attorney is necessary during this process, one thing is certain: the cost of professional legal fees upfront will pale in comparison to legal fees incurred during litigation as the result of a breach. Because there are several legal considerations to consider in a real estate transaction, hiring an experienced Chicago real estate attorney is key to protecting your investment.

Review of Purchase and Sale Contract

A real estate attorney will review the purchase and sale contract - preferably before it is signed - to ensure the rights, obligations and remedies in the contract favor the client. Negotiating the specific terms of the contract to ensure you are protected during the entire process is just one of the legal services provided. An attorney can change legal language in a purchase contract to protect the interest of a buyer, such as requiring the purchase and sale contingent on the appraisal, financing or a satisfactory home inspection. A contingency is a condition precedent to finalizing the sale; if the matter specified in the contingency does not occur or is not resolved to the buyer’s satisfaction, the buyer has the right to terminate the sale and have the earnest money deposit returned.

Title, Financing and Legacy Concerns

Unlike other participants in a purchase and sale of a home, such as realtors, lenders, appraisers, inspectors, and title insurance company representatives, your lawyer owes an absolute duty of loyalty to you in a real estate transaction. A qualified real estate attorney can review title documents to ensure clear and marketable title to the property is conveyed at closing, explain and evaluate financing options available to the buyer, advise the seller regarding tax implications as a result of selling, and ensure all title documents are correctly prepared so that the conveyance is effective and valid. A buyer’s attorney will review title to determine if there is any interference with the client’s future property rights, such as easements, restrictions or encroachments. Furthermore, if the buyer is a couple, a real estate attorney can give advice as to the legal consequences of holding title as joint tenants or tenants by the entirety.

Representation at Closing

At closing, the attorney can assist clients by guiding them through the process of signing the large number of documents needed to convey the property, as well as ensuring all documents were satisfactorily prepared. The seller’s attorney will review the proposed settlement statement, which details all of the fees and charges the buyer and seller will incur, which is prepared by the buyer’s lawyer. This “second look” at the numbers ensures the math was done correctly because the attorney will cross check all debits and credits prior to approval. The seller’s attorney will also obtain the payoff amount from the seller’s lender and will prepare a certificate of satisfaction for the buyer, showing the loan has been paid in full. Before closing, the buyer’s attorney will communicate with the client’s lender, the realtors and the seller’s attorney to ensure all conditions have been met in order to close successfully.

The purchase or sale of a home can be one of the largest transactions during one’s lifetime. Contact an Illinois real estate attorney today if you are considering purchasing or selling a property. A small investment in legal fees upfront will save you thousands of dollars in the long run by avoiding legal consequences from mistakes or omissions during the sale. The Law Offices of Gilbert C. Schumm has over three decades of experience and serves the communities of Mt. Prospect, Hanover Park, Arlington Heights, Rolling Meadows and Roselle, among others.