To learn more about the requirements for a loan modification, continue reading and reach out to our firm today to speak with a skilled Newburgh bankruptcy lawyer. Our legal team is on your side.
What are the two kinds of a loan modification in New York?
In the event that debtors are having a hard time with their mortgage payments, loan modifications can be used. This allows debtors to adjust their loans so that the payments can better meet their financial needs. It is important to take note of the two types of loan modification programs in New York. They include the following:
- Government-Run: This program refers to permitting a debtor to extend their loan to a 40-year plan that lowers the cost of their monthly payments and reduces the interest rate of the loan to 2% for a 5 year period.
- Bank-Run: This option can decrease a debtor’s interest rate, repair an adjustable rate, or not require them to pay the excess principal.
Am I qualified to receive a loan modification?
In the state of New York, not everyone is eligible for a loan modification. In order to decide your eligibility, the bank will review your finances. Some of the documentation required to apply for a modification can include:
- Paystubs from all wage earners in your household
- Your personal or business tax records
- Various financial statements
- Profit and loss statements
- A current utility bill that can confirm you are living in your home
- A hardship letter that demonstrates the reasons why you are not capable of paying your mortgage at that moment. It is critical that you write this letter with an experienced bankruptcy attorney.
To learn more about your eligibility, it is in your best interest to reach out to our firm today to discuss the details of your case and your options with our experienced legal team.
What happens after I obtain a loan modification?
In the event that you obtain a government loan modification, your interest rate will be reduced to 2%, and your loan term will be expanded to 40 years. Then, you will begin receiving lower monthly payments. In contrast, an internal banking program may lower your interest rate, fix an adjustable rate, forgive excess principal, or place your defaulted payments at the end of your loan. This suggests that you may not have to pay these debts until you either refinance or sell your home.
Do not wait to reach out to our firm if you are going through a foreclosure. You may be able to apply for a loan modification if you are eligible. Contact our firm today to learn more about how our skilled bankruptcy attorneys can help you.
CONTACT A BANKRUPTCY LAWYER TO DISCUSS YOUR DEBT OR COLLECTION ISSUE
Michael D. Pinsky, P.C. represents clients in bankruptcy actions and related matters. Please call 845-394-2616 or contact the firm online to schedule a consultation.
