Foreclosures are at an all time high and many are scrambling for answers on what to do about homes that are "underwater", i.e. owners owe more than the house is worth. Higgins Law, LLC defends against foreclosures by obtaining modifications that lower payments temporarily, deeds in lieu of foreclosure, short sales, or bankruptcy to save a home where mortgage payments have not been paid and the lender will not accept payments. Call Higgins Law, LLC today for an evaluation of your foreclosure defense at (863) 325-0343.
Foreclosure defense has changed some recently. While many people were struggling to get modifications two and three years ago, getting the "run around", running into one delay after another by the lender, who seemed to always need just one more document before they could make a decision, now lenders are promptly writing modifications without so much red tape and delay. What changed? The top five lenders were sued in a huge class action lawsuit pertaining to their fraudulent practices, such as the robosigning, for example, and they receive credits toward what they owe for that suit by writing down principal balances and giving other loan modifications. Don't get too excited about those principal reductions though. They are only available with the top five lenders and only apply to conventional loans. It is very highly unlikely at the time of this writing that you will receive a principal reduction on a loan guaranteed by FHA, VA, Fannie Mae or Freddie Mac. It also is less likely if you have PMI (principal mortgage insurance). This is because the lenders have a better option with those guarantees.
Lenders, like any other business, watch the bottom line. They want to make the most money possible for their shareholders, and the more breaks they give you, the less money they make. Loss of business profits make for unhappy shareholders, so they only intentionally allow for a loss it if they are required to do so or have no better alternative. Due to the class action lawsuit, they do have to write down principal on some loans, but only in very limited circumstances, and perhaps to the degree you would hope they would.
If you are looking for principal reduction on your home mortgage, first find out whether you have a conventional mortgage, then look to see if you carried PMI. If you have a conventional mortgage, there is hope for a principal reduction, because FHA, VA, Fannie Mae, and Freddie Mac are not standing at the ready to give the lender the money if you don't pay it. If you have PMI, and you default on your home mortgage loan, the lender has a better alternative than reducing your principal, i.e. they can just foreclose and show the insurance company you defaulted and they had to foreclose, then PMI pays them 100% of the insured value of your mortgage in that insurance claim. It would not make sense for them to reduce your principal and accept small monthly payments over time when the alternative is to accept a lump sum of the whole insured value of your mortgage loan all at once from the insurance company that gives them lots of money to invest elsewhere to make more money.
So if you are interested in a principal reduction for your upside down home mortgage loan, first look to see if you have a conventional mortgage, and then look to see if you carried PMI. Then call Higgins Law, LLC for foreclosure defense and ask for mediation to obtain a loan modification with principal reduction. There are no guarantees, but when the lender is motivated, a mediation can be the resolution you need for your home mortgage loan default.
"The big five" lenders who were sued are motivated to modify loans and are now doing so, but modifications by other lenders may be less likely. For foreclosure defense including mediation to request a modification or principal reduction on your defaulted mortgage, please contact Higgins Law, LLC today at firstname.lastname@example.org or call (863) 325-0343. We'd be glad to help and your first appointment will be promptly set. We love our clients.