Over and over again we here the same comment from our clients that attempt loan modification.

  1. “Everytime I speak with the mortgage company, I get a different person who tells me something different.”
  2. “I sent in my paperwork three times because they couldn’t find it.”
  3. ”I sent in my paperwork only to be told that it was late, and that program was no longer open.”

Why You Need a Bankruptcy Attorney

The facts are that most mortgage companies will not modify the principle, interest rate or place the overdue payments at the end of the mortgage unless it is profitable for them to do that. Some government programs did allow it but the time period for most of those programs has expired. If a mortgage company will get less in foreclosure than they would if you kept it, some companies will work out a repayment plan. But very few homeowners have been helped by the HAMP program. The program is over a year old and it seems that less than 10% of the mortgages were modified and few if any of the foreclosures stalled. Often the mortgage companies only gathered information to help them collect or payments from the homeowners and foreclosed anyway.

Debt Settlement: Debt Settlement companies have a very low rate of success. Debt Settlement companies take up to 40% fess from payments and if their plans fail the debtor is more in debt normally than when they started the program. Even if the Debtor is successful they are left with a tax debt for what they saved in the plan. Chapter 13 cases can repay as little as 1% and do not hurt your credit any more than debt settlement.

Short Sales: can trigger taxes for the seller and in some cases the mortgage company may still attempt to collect.

Bankruptcy: Once a Chapter 7 bankruptcy is filed the debtor normally only needs to complete a class and show up sober at his hearing that rarely lasts over 5 minutes. If the Debtor becomes out of work or disabled in a Chapter 13 he is often able to obtain a hardship discharge in the 13 or convert to a Chapter 7.

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