LAW OFFICES OF

PAUL J. GELMAN, P.C.

ATTORNEY-AT-LAW

NJ:   (856) 489-7668

PA:   (215) 772-0990

DE:   (302) 731-1320

 

                           
 Types of Resolutions                  Tips and FAQ

Do not disregard the problem -
If you know you are having trouble making your payment and/or are receiving letters from your lender you must confront the issue.  The further behind you become on your payments the more difficult it will be to modify your loan, so act fast.

Communication is the key -
Did you know it costs the bank up to $50,000 out of pocket to handle foreclosure?  The lender does not want your house!  They will often be willing to do a loan modification in order to ensure that you are able to stay in your home.  Be sure to keep in contact with your lender.  Refusing to open your mail will not be excused in court.

Be well informed -
Be sure to re-read your loan documents and make sure to educate yourself on foreclosure laws in your state as every state has their own variation on these laws.
            - New Jersey
            - Pennsylvania
            - Delaware

Find help -
Find a HUD approved counselor. Often they will offer their service for free or at a very low cost. Contact us or others willing to help. You must beware of scams; there are plenty of businesses that claim to have the ability to get rid of your debt and mortgage burdens. Read everything carefully and understand that you should never sign anything you do not understand.

Reevaluate your spending -
Create a list of priorities (food, clothing and shelter), and take a look at your assets. For instance, you may want to give up your second car, boat or other non essential items.  It is important to let your lender know that you are making an effort to pay your mortgage. The most important step to avoiding foreclosure is to explore all of your options. Only by confronting the problem head on can you tackle the issue. Don't let yourself become a statistic. Take the steps necessary to avoid foreclosure TODAY!

Frequently Asked Questions?

Q. What if my credit is bad, am I wasting my time?
A. NO, almost everyone who has fallen behind on their mortgage payments have had some credit problems in the past.  We help people regardless of credit.

Q. What is foreclosure?
A. When a borrower has been unable to make the scheduled payments on his or her mortgage loan for an extended length of time, the lender may feel that the loan has been defaulted, and will undertake legal proceedings in order to repossess the property.  Any equity the homeowner may have built up in the home is lost, and the homeowner will have to vacate the premises.  Laws on how long a homeowner has before a lender can start foreclosure proceedings vary from state to state.

Q. How can Paul J. Gelman help me?
A. We go to great lengths to make sure we are thorough when completing your financial documentation with you in order to be certain you comply with the institutions stringent approval process. We have the experience and expertise to predetermine and prepare for any pitfalls that may occur when dealing in negotiations with banks/servicers.

Q. I just received a notice of foreclosure. How long do I have to make my decision on what to do?
A. When it comes to dealing with late mortgage payments, time is not your friend. The sooner you act - the better. Your lender will be much more confident in your willingness to make payments on your mortgage if you deal with the situation immediately, rather than waiting until your back is against the wall. The home foreclosure process can take anywhere from a few weeks to many months, depending on your state law and the method of foreclosure your lender chooses to use, but it is imperative that you take action as quickly as possible.

Q. What is loss mitigation?
A. Loss mitigation is a set of programs/solutions that consists of a variety of procedures set up by the government and lenders to assist homeowners threatened by foreclosure. The goal of loss mitigation is to help the homeowner to stay in their home, and protect their credit history.

Q. Can't I negotiate with my lender myself?
A. Yes, you can certainly discuss your difficulties with your lender yourself, and work out a suitable arrangement. However, if your lender is not cooperative, or puts you off, then it is the time to contact us. Don't wait because, as it cannot be emphasized enough - time is not on your side in these matters. We provide the professional representation that you need to achieve a workout agreement with your lender.

Q. How long is this going to take?
A. Working with your lender to reach a suitable arrangement can take anywhere from a few days to several months. It all depends on your current financial position, and whether or not foreclosure proceedings have already been started. Typically, it takes several weeks to complete a workout agreement and stop foreclosure proceedings.

Q. I'm currently in bankruptcy. Can you still help?
A. It is possible to help you. It all depends on your unique situation. We cannot, however, negotiate a workout agreement with your lender until your mortgage has been discharged or dismissed from the bankruptcy proceedings, or permission has been obtained through the bankruptcy.

Q. I've already talked with my lender. They just want to get paid. Can you still help me?
A. Most of our clients have experienced this kind of inflexibility from their lenders before calling us. We help get your bank to listen to your needs. Our integrity and professionalism have earned us a reputation that allows us to be heard when no one else can get through the red tape. We will use our experience and connections to your advantage.

Q. Should I file for bankruptcy to save my house?
A. Maybe, but this is often not a good idea. According to the American Bar Association, 96% of homeowners who declare bankruptcy end up losing their home to foreclosure. There are certain times when bankruptcy is appropriate - we recommend you consult a reputable attorney in this regard. If you would like us to refer you to one, we can.

Q. Do I need a special type of mortgage loan for you to help me?
A. No. We work with any type of mortgage loan, from FHA, Rural Administration, VA, Freddie Mac, Fannie Mae, to conventional loans.

Mortgage Modification or Restructuring -
    The process where the terms of a mortgage are changed outside of the original terms of the contract agreed to by the lender and borrower.  In general, any loan can be modified.  In the normal progression of a mortgage, payments of interest and principal are made until the mortgage is paid in full (or paid off).  Typically, until the mortgage is paid, the lender holds a lien on the property and if the borrower sells the property before the mortgage is paid-off, the unpaid balance of the mortgage is remitted to the lender to release the lien.  Generally speaking, any change to the mortgage terms is a modification, but as the term is used it refers to a change in terms based upon either the specific inability of the borrower to remain current on payments as stated in the mortgage or more generally government mandate to lenders.

Reinstatement or Repayment Plans -
    
Bringing loan back to current status and allowing payments to be accepted.

Principle Reductions or Short Sales -
     The lender lowers principle amount due and/or accepts less than the total amount due on the current mortgage to match the homes' current market value.

Forbearance Agreements -
     Is a special agreement between the lender and the borrower in order to delay a foreclosure.  If a borrower has problems making their payments due to unexpected circumstances, this may result in the lender to start the foreclosure process.  To avoid this situation, the lender and the borrower have the option to make an agreement that says the lender will delay his right to foreclose if the borrower could catch-up on their payment schedule in a certain amount of time.  This time-period and the payment plan depends on the details of the agreement which are accepted by both parties involved.  ** Note that forbearance is just for "temporary" financial problems.  If the borrower has more serious problems, then forbearance is not usually a solution.

Deed In Lieu of Foreclosure -
     Is an
instrument in which a borrower conveys all interest in a real property to the lender to satisfy a loan that is in default and avoid foreclosure proceedings.  It offers several advantages to both the borrower and the lender.  The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan.  The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure.  Another benefit to the borrower is that it hurts their credit less than a foreclosure does.  Advantages to a lender include a reduction in the time and cost of a repossession, and additional advantages if the borrower subsequently files for bankruptcy.  In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred.  Both sides must enter into the transaction voluntarily and in good faith.  The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.

Loan Refinance -
     The replacement of an existing lien or debt obligation with a new lien or debt obligation with new terms. Refinancing can alter the monthly payments owed on the loan either by changing the loan's interest rate, or by altering the maturity of the loan. By refinancing an adjustable-rate mortgage into a fixed-rate one, the risk of interest rates increasing dramatically is removed, thus ensuring a steady interest rate over time.

Bankruptcy -

     Could be an option on a case-by-case basis. If you would like us to refer you to a bankruptcy attorney, we can.

According to the Center for Responsible lending, foreclosures continue to rise, with a new one started every 13 seconds!  Please do not wait any longer to contact us; your home depends on it.

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