How to Renegotiate Your Mortgage

For homeowners in Joplin and elsewhere in Missouri, a mortgage renegotiation can preclude the necessity of hiring a bankruptcy attorney at some point in the future. Obviously, the goal is to reduce monthly payments to a manageable level. But a mortgage negotiation can only be a problem solver if done under favorable terms with ethical parties.

In the current lending environment, an attempt to renegotiate mortgage terms successfully is not always possible. But as a homeowner, you have every legal right to seek out the most fair, equitable terms possible. Here is what you should look to achieve:

• A permanent reduction in interest rate
• A reduction in principal owed
• Reduction of mortgage loan value to appraised property value

Beware of fraudulent loan modification firms

The problem is, there are many unscrupulous parties seeking to take more money from individuals who want to achieve a modification of their existing mortgage. Headed by a lawyer or lawyers, these loan modification firms claim to be able to negotiate your home loan terms by some means that you would not be able to do yourself. Before they begin, however, they charge a non-refundable upfront fee, regardless of whether they are successful or not in the loan modification.

The individual can look into legitimate, ethical programs that are sponsored by the U.S. Department of Housing and Urban Development (HUD). Specifically, the Hope for Homeowners program requires the following:

• The property being renegotiated is your primary residence and you have no other residential property such as a second home.

• Your existing property mortgage began on or before January 1, 2008.

• You cannot pay your existing mortgage without help.

• Your monthly payments as of March 2008 are greater than 31 percent of your gross monthly income.

• You have no convictions for fraud in the past ten years, you have never intentionally defaulted on debt, and you have never knowingly provided false information to obtain an existing mortgage.

Such a loan modification must be negotiated with your existing lender or another Federal Housing Authority-approved lender, not the FHA or HUD. You will not be able to borrow more than 90 percent of the current appraised value of the property. You must also pay an upfront mortgage insurance payment of 3 percent, and an annual 1.5 percent annual mortgage insurance premium on the outstanding mortgage balance (premiums are rolled into monthly payments). Closing costs accompany these loans.

Contact us for help when you have been victimized

If you are a victim of an unethical loan modification or mortgage renegotiation scheme, contact the Hershewe Law Firm at 877-382-9734. Or contact us online today for a free consultation about your case.