the law office of tiffany r. norman

The Law Office of Tiffany R. NormanBankruptcy and Loan Modification Attorney

What is a Loan Modification?

A loan modification is when a borrower, who is facing great financial hardship, works with their lender to change the terms of their mortgage loan to make it affordable.


When is a Person Eligible for a Loan Modification? • The mortgage rate adjusts; • Illness; • Loss of job or reduced income; • Failed business;• Job relocation; • Death of spouse or co-borrower; • Divorce or marital separation; • Military duty; • Medical bills; and • Damage to property.


What does a Loan Modification Do? • Reduce monthly interest rate;• Reduce payments to a more affordable dollar amount;• Reduce the current balance of the loan;• Brings a past due balance current;• Extend the term of the loan, which helps reduce the current payment.• Extend current variable rate beyond adjustment period.


What are the Reasons to Modify a Loan? • Reinstates the loan at a fixed interest rate;• If there are missed payments they can be included into the spread of the loan;• Also, a Loan Modification will help a person’s credit score since the debt ratio will be lower as a result of your new payment scheme;• Your payments will be lower and more affordable to you thus help you prevent any late payments on your mortgage;• Whereas, a foreclosure is one of the worst items to appear on your credit report and will stay on your report for seven years. It is very difficult, if not impossible, to be qualified for another market rate mortgage for a least three-four years after foreclosure.


Obama’s Home Affordable Modification Weekly Address

Please press play in the next slide to watch Obama’s Weekly Address Video


Obama’s Home Affordable Modification Each bank has different loan modification programs. Obama’s program helps both the lenders and the borrowers.

To qualify, you must:

1.Have a mortgage payment that is not affordable, because of change in income or expenses;

2. Have originated your loan before January 1, 2009; 3.Have an unpaid balance that is equal to or less than $729,750 (for a single-family home);


4. Be owner occupied in a one to four unit property;

5.Your monthly mortgage payment (including taxes, insurance, and home owners insurance) must also be more than 31% of your gross (pre-tax) monthly income.

a. For example, if your gross wage amount is $6,000.00, then your monthly mortgage payment should be over $1,860.00.


Things to Know: • Even if you answer YES to the above, only your lender can tell you if you qualify. • You can be current on your payments; • If you have a second mortgage you still qualify IF your first loan is eligible for a modification.

• Lender participation in this program is VOLUNTARY. To determine if lender is participating check www.makinghomesaffordable.gov.

http://www.makinghomesaffordable.gov/


If You Are Eligible Under the Obama Program: • If your servicer determines you are eligible, they will determine how much of an interest reduction will be needed in order to get you at 31% of your gross income. • Your lender will also add past due charges (interest, taxes, insurance and costs that your lender paid to other parties on your behalf, not late fees, those must be waived) to the loan balance.

• The lenders will then put you on a trial modification for three months at the new interest rate and payment level. Your interest rate can be as low as 2%.


If You Are Eligible Under the Obama Program: • Interest rate will be for five years, and then it will increase. • The modified amount will include property taxes and homeowners insurance. If you qualify there are incentives to both the borrower and to the lender.

Pay for Success Incentives to Servicers:

Servicers receive $1,000.00 for each modification and if borrower stays current another $1,000.00 per year for the next 3 years;


Incentives to Help Borrowers Stay Current:

As long as the borrower stays current the borrower will get up to $1,000.00 per year for five years that will go directly toward reducing their principle balance.

Reaching Borrowers Early:

An incentive payment of $500 will be paid to servicers, and an incentive payment of $1,500 will be paid to mortgage holders, if they modify at-risk loans before the borrower falls behind.


Forensic Audit • An underwriter reviews the original loan documents to determine if there are any Federal, State, County and Municipal code violations, along with the severity and specific code violations.

How does this help you?

• Powerful tool to use against lenders;• Estimates state that 83% of the mortgages have at least some violations; and• If violations are found, they can result in loan modification.


Why Would a Bank Modify? A bank prefers to modify a loan because it is less expense than foreclosing on a property. The projected loss for loan modification is 12% and for foreclosure it is 42%.


BELOW ARE SOME EXAMPLES OF SUCCESSFUL LOAN MODIFICATIONS ACCOMPLISHED BY THE LAW OFFICE OF TIFFANY R. NORMAN: 1. A Client was 8 months behind on his 1st mortgage payment. Reduced his interest rate from 11.75% to 2.0%. His payments went from $3,387.64 per month to $1,350.42, a monthly savings of $2,037.22, an annual savings of $24,446.64. Over a five year period, our client saved $122,233.20.

The interest on his second loan was 13.99%; The Law Office of Tiffany R. Norman was successful in modifying this interest down to 8.99%. Our client’s payments went from $651.24 to $ 412.04, principal plus interest. This is a monthly savings of $239.20, and an annual savings of $2,870.40, over the term of the 30 year loan, $86,112.00. Our client saved a grand total of $208,345.20.


BELOW ARE SOME EXAMPLES OF SUCCESSFUL LOAN MODIFICATIONS ACCOMPLISHED BY THE LAW OFFICE OF TIFFANY R. NORMAN:

2. Our client had a negative amortization loan and was current on we were able to modify her loan down to a 4.25% fixed at a term for five years. Our client’s monthly mortgage payments went from $4,824.00 down to $2,176.00 per month, saving her $2,648.00 per month. Our client’s annual savings were $31,776.00, and over the term of the five year loan a savings of $158,880.00.


BELOW ARE SOME EXAMPLES OF SUCCESSFUL LOAN MODIFICATIONS ACCOMPLISHED BY THE LAW OFFICE OF TIFFANY R. NORMAN: 3. Our client had a negative amortization loan and was current on her monthly mortgage payments. Modified her loan to a rate of 5.0% fixed for a 30 year term. Her minimum loan payments were $2,528.38, increasing her loan balance to $3,248.57 per month. Her loan was modified to a fixed interest and is now at $3,511.99 per month, saving our client $623.39 on interest monthly, plus paying principal of $886.81 per month, together a savings of $1,510.20 monthly, $18,122.40 annually, and over the term of the 30 year loan, $543,672.00.


BELOW ARE SOME EXAMPLES OF SUCCESSFUL LOAN MODIFICATIONS ACCOMPLISHED BY THE LAW OFFICE OF TIFFANY R. NORMAN: 4. Our client was in a short sale, had not made a mortgage payment for 10 months, the property was not owner occupied, and he had filed bankruptcy on the property. Modified his client’s loan from 8.5% interest rate, negative amortization to a fixed rate of 1.0%, saving the client $1,568.00 monthly, and $94,080.00 over five years. Late payments added to the end.


WHY SHOULD YOU WORK WITH AN ATTORNEY 1.If you have received a Notice of Default or Notice of Trustee Sale (Pre-Foreclosure Notice), it is illegal for a non-attorney to collect an advanced fee. You can only pay an attorney or law firm to assist you.

2. A loan modification process is a long term process and takes several calls for the lender to assist you. Hiring someone that has the time, experience and knowledge to help you is important.


WHY SHOULD YOU WORK WITH AN ATTORNEY 3. If you are negotiating for yourself you do not know what to ask for. You may ask the lender to reduce your principle or your interest but not know what it should be reduced to. You need to work with those that know how to negotiate on your behalf to get you the best possible deal. 4. We know what numbers the banks are looking for. If you don’t know the numbers, the banks will just deny you after you have spent several months on phone calls and have been waiting. We can assist you in making you the best candidate and helping you save your home.


Thank You