You’re completely able to apply for a loan modification on your own, but hiring a lawyer might just help ensure you actually get that loan modification.
Understand Loan Modification
A loan modification is a permanent restructuring of your mortgage. During a loan modification a lender changes one or more of the terms of the loan to make the loan more affordable. And there are some basics you’ll want and need to know to move forward with your loan modification. An attorney can help you with this process, but if you decide to go it alone you’ll need to make sure you fully and completely understand how the lender is going to modify your loan.
Reducing Monthly Loan Payment
Here are some of the things a lender can do to reduce your monthly loan payment as part of your loan modification:
- reduce interest rate
- forgive a portion of the principal balance
- convert from a variable interest rate to a fixed interest rate
- extend the length of the term of the loan
You will need to submit an application to your lender along with certain documents (typically bank statements and most recent paystubs) in order to receive your loan modification.
Hiring a Lawyer
Hiring a lawyer, or at least consulting with one prior to your loan modification might be a good step. You should have a complete understanding of your legal rights should a lender violate the law. A lawyer can also help you decide if a loan modification can help you if you’re facing foreclosure. In these cases, working with a lawyer can mean the difference between losing your home or being able to final afford it through a loan modification.
Source: Nolo, Should I Hire a Lawyer to Help With My Mortgage Modification?, 2015