Do You Need a Lawyer for a Loan Modification in California?
There are situations in which it may be in your best interest to modify the terms of the mortgage on your home, and this is commonly referred to as loan modification in California. The economic upheaval caused by the COVID-19 pandemic has caused many people throughout the state to fall behind on their mortgage payments or request a loan modification with their mortgage lender, and one of the most common questions asked to our lawyers is whether someone needs an attorney for a loan modification in California?
At the Law Offices of Omar Gastelum and Associates, our experienced lawyers can ensure that you receive the best possible terms for your loan modification. To learn more about your legal options, call or contact our office today.
What is a Loan Modification?
A loan modification is the restructuring of an existing mortgage with a lender that alters the original terms of the loan. A modification may defer payments, adjust the interest rate, or extend the length of the loan. In some cases, a loan modification may even result in a lender forgiving or canceling a portion of the mortgage debt in order to avoid foreclosure or to create more affordable monthly payments.
Loan Modification and COVID-19
California lawmakers have recognized the financial burden that the COVID-19 pandemic has had on its residents, particularly for homeowners who have fallen behind on their mortgage payments. As such, the California Housing Finance Agency (CalHFA) has created a program for these homeowners that may offer some relief, and a knowledgeable attorney can help navigate this process. The CalHFA program will pay a total of one billion dollars in missed mortgage payments for those who qualify that is structured as a one-time grant that homeowners do not have to repay.
In order to be eligible for the COVID-19 loan modification program, a homeowner must show that they have experienced pandemic-related financial hardship that has resulted in falling behind on their mortgage payments. In addition, they must be able to show the following:
- Household income at or below the area median income,
- Two or more missed mortgage payments prior to December 31, 2021,
- Faced pandemic-related financial hardship after January 21, 2020,
- Ownership of a single family home, condominium, or permanently affixed home, and
- Either receives public assistance, is severely housing burdened, or have no other loan modifications through the lender
A lawyer can help homeowners negotiate a loan modification with their lender or apply for assistance through the CalHFA pandemic assistance program. An attorney can help collect all the necessary information, submit the documentation, and negotiate the terms that are in the homeowner’s best interest. To learn more, talk to our office today.
Call or Contact Us Now
Do you wish to learn more about how to secure a loan modification for your existing mortgage in the Los Angeles area? If so, call the office or contact us at The Law Offices of Omar Gastelum and Associates to schedule a consultation.