North Carolina FAQ's For Loan Modifications

What exactly is a loan modification?

A loan modification is a permanent change in one or more terms of a borrower's home loan, that allows the loan to be reinstated, and results in a payment the homeowner can afford.

Why should I use an Attorney for Loan Modifications?
Bank loan officers are skilled negotiators, and need to protect the interests of their employers. The loan modification process is a legal process, and if not handled properly according to federal and state laws, things can get worse for you in the long run. The Porter Law Firm, PLLC has extensive and wide ranging experience negotiating with banks and legal entities, and they understand state and federal law as well as lending regulations. They can also use the Truth in Lending act (TILA) and Real Estate and Settlement Procedures act (RESPA) to your advantage.

How do I know if I will qualify for a loan modification?

The main component to a successful modification is your ability to make timely modified payments now and in the future. The Porter Law Firm, PLLC will review your financial situation and prepare the best course of action to negotiate your mortgage.

Do I have to be currently delinquent on my payments to get a loan modification?

Most lenders accept request for modification, in imminent default situations from homeowners who are not currently delinquent. These imminent default situations have to be proven. Many examples may be an increased interest which will place the homeowner outside their ability to make the larger mortgage payment. Other circumstances may include reduced hours at work or a job loss of a spouse.

What is an acceptable hardship situation?

Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the lenders consider divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service to be acceptable reasons to consider a loan modification. A compelling hardship letter included on your application is a very important part of a successful application.

Will a loan modification help me stop foreclosure?

Yes, that is the goal-by working with your lender to find a loan workout solution, your loan is brought current and the foreclosure process is halted. If the lender is not in agreeance, has no desire to stop the sale then no a loan modification would not stop the foreclosure process. The Porter Law Firm, works aggressively towards communicating with the banks foreclosure department and loss mitigations attempting to request postponements of these sales to avoid this situation from arising. This firm is not a foreclosure defense attorney, rather a loan modification advocate. In the process of loan modifications it is sometimes necessary to request postponements from the lender to gain enough time to effectively procure a solution on seriously delinquent client who has been placed in default status.

Foreclosure TimeLine:

“Pre-foreclosure Period” Foreclosures go through the courts when there are title problems. A lawsuit is filed to obtain a court order of foreclosure, and the foreclosure sale process is directed by the court.

Out-of-court proceedings are most common. They occur when a clause exists in a mortgage that empowers the lender to sell the property if the borrower defaults. A preliminary hearing is conducted before a power of sale foreclosure can take place. Not fewer than 10 days before the notice of hearing, the lender mails or personally delivers the amount due plus expenses to the borrower. After the notices have been issued, the county clerk conducts the hearing to determine whether a foreclosure sale will take place.

The typical foreclosure timeline is approximately three to four months.

Foreclosure prevention is key.

Notice of Sale / Auction

If the deed of trust or mortgage contains a power of sale clause and indicates the time, place, and terms of sale, then the specified procedure must be followed.

A notice of sale must include the names of all parties involved, a legal description of the property, and the date, time and location of the sale. The lender mails the notice of sale to the borrower and relevant parties at least 20 days prior to the sale date. The lender also publishes the notice in a local newspaper once a week for two weeks, and the last publication cannot be more than 10 days before the sale date. Further, the lender posts the notice of sale at the county courthouse at least 20 days before the sale.

The sale is conducted between 10:00 a.m. and 4:00 p.m. at the courthouse, and the property is sold to the highest bidder. If the sale is postponed, a notice stating the revised date and time of the sale is posted at the courthouse.

The borrower has a 10-day right of redemption after the sale by paying what is owed to the lender plus any sale costs. Further, any party may enter an upset bid during that same period by submitting a deposit of at least 5 percent of the bid to the county clerk.

These are estimates, the timeline may increase or decrease per county based on demand or backlog.

What can I do to save my home, and how long does the process take?

We will diligently analyze your individual financial situation and find you a realistic solution that meets your objectives. One of our options in the battle with mortgage companies is the Truth in Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA"). These are guidelines mortgage companies must follow when originating loans. Nearly every residential mortgage loan has TILA and/or RESPA violations that can be used as leverage in negotiations, or litigated. The following circumstances may affect your process' length of time:

• Your mortgage company
• Your type of loan
• Your financial capability
• The seriousness of the delinquency
• Your reason for default (if applicable)

How will I know my best option?

The Porter Law Firm, PLLC will guide you through the various options that are available to you. Your options are dependent on your assets, liabilities, income, expenses, mortgage default reason, lender, and loan type. A careful review of all your documents is necessary for us to provide you with the best options.

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