It’s no surprise: Individuals and families across the New York City metro, New Jersey and all other parts of the country harbor a deep personal connection to their homes.
Family residences spell far more than mere walls and a ceiling to their inhabitants. A home shelters children, welcomes friends and stands strong and secure during the proverbial storms of life. It serves as the epicenter of a family’s growth and dreams.
When it is threatened, homeowners logically stress and worry over next-step moves to make to ensure continued stability. Their concerns are understandably heightened when they face stark financial challenges.
Such challenges exist currently for legions of homeowners affected by pandemic-linked and other dislocations that have adversely affected jobs and savings. Many people who have timely managed home payments for years now find themselves underwater on their mortgages.
Those individuals face pressures through no fault of their own. As we note on our website at the proven New York City and New Jersey real estate law firm of Bonfiglio & Asterita, the struggles they face are “due to circumstances beyond their control.”
Loan modification: a proven option in some mortgage scenarios
Many homeowners who have fallen behind on mortgage payments believe that a lender will be unwilling to work with them and simply opt instead to foreclose on a residence.
That is sometimes true, but far from routinely being the case. A negotiated loan modification can provide broadly beneficial benefits to a borrower and lender, respectively. That is a bottom line that few financing entities will ever turn their backs on.
An in-depth legal overview of the loan modification process points to many adjustment possibilities, including these:
- Extension of loan term
- Adding missed payments to the end of an existing term
- Reduction in interest rate (and sometimes principal owed in each payment installment)
- Forbearance (reduction or suspension of owed payments)
Homeowners are sometimes shamed or intimidated by the prospect of communicating with a lender concerning a loan modification.
That should never be the case. Again, lenders are often eager to reach an agreement that keeps a mortgage in play.
We alluded to the potential benefits of a loan modification in a recent firm blog post.
We stressed therein this key point: “You won’t know if you qualify for a mortgage modification until you ask.”